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Comex Copper Rally Stalls As Euro Worries Continue
Nov 17,2011 08:49CST
industry news
Source:SMM
Copper's rebound stalled Wednesday, and futures ended lower for the first time in four sessions as concerns about the euro zone's sovereign-debt crisis sent investors cashing out of the metal.

Nov 16, 2011 NEW YORK (Dow Jones)--Copper's rebound stalled Wednesday, and futures ended lower for the first time in four sessions as concerns about the euro zone's sovereign-debt crisis sent investors cashing out of the industrial metal.

The most actively traded contract, for December delivery, fell 1.70 cents, or 0.5%, to settle at $3.4845 a pound on the Comex division of the New York Mercantile Exchange.

Copper came under pressure beginning in Asian trading hours, traders with RBC Capital Markets said in a note, and were unable to recover as "concerns about Europe continue to keep the market on edge."

The European Central Bank stepped in to buy Italian, Spanish and Portuguese government bonds Wednesday in an effort to reduce the borrowing costs of the debt-laden countries.

Europe's debt situation remains in the spotlight, as the region is second behind China in its consumption of copper. The euro zone's protracted struggle to rein in its debt crisis worries investors as slower economic activity in Europe would dent global demand for the industrial metal.

Recent concerns about the financial position of Italy, the third-largest economy in the currency bloc, have raised concerns that liquidity in broader markets may falter.

"Copper will be driven by events out of Europe," said Matt Zeman, head of trading at Kingsview Financial, adding that prices are likely to continue trading in a tight range or head lower.

Copper traders kept a watchful eye on the currency markets, as the euro again headed lower against the dollar. The euro was recently trading at $1.3525, compared with $1.3858 at the start of the month.

Copper is priced in dollars and is more expensive to buyers who use other currencies when the dollar rallies.

"Investors are being careful," a London Metal Exchange trader said. "The expectations generally are that any rallies will be sold into."

Copper settlements (ranges include electronic and pit trading):
Nov $3.4820; down 1.70 cents; Range $3.4290-$3.4990
Dec $3.4845; down 1.70 cents; Range $3.4300-$3.5380

 

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