Comex copper price benefits from positive US data

Comex copper prices rose for the fifth consecutive session Friday Oct 28 on better-than-expected US data, while investors prepare to head to London for a week-long conference.

Copper for December settlement on the Comex division of the New York Mercantile Exchange climbed 1.45 cents or 0.7% to $2.1780 per pound. The contract has finished in positive territory every session this week and is trading at a two-week high.

Comex gold for December delivery fell $6.20 or 0.5% to $1,263.30 per oz. Trade has ranged from $1,262.0 to $1,272.70.

This morning, fresh US data showed the American economy grew at 2.9% during the third-quarter, above the forecast of 2.5% and previous reading of 1.4%. Advance GDP price index over the same period also exceeded expectations at 1.5% expansion, 1.3% was called for.

Lastly, employment cost index quarter-on-quarter was in-line with economic consensus at 0.6%. Later, University of Michigan consumer sentiment and inflation expectations are due.

The positive figures follow weeks of solid manufacturing figures in the US, Europe and Asia, which also provided a lift for the base metals complex.

“A lot of the economic news globally in recent weeks has been improving and that should help demand for metals – for a long time sluggish demand growth has been the weak link in the supply/demand equation – so any pick-up in demand may well start to prompt a bit more restocking,” Metal Bulletin analyst William Adams said.

The positive US data weighed on the precious metals complex because now 75% of investors see the Federal Reserve hiking interest rates in December. With the presidential election in less than two weeks, it is unlikely the policy-board adjusts the Federal Funds rate beforehand.

But chairwoman Janet Yellen has been steadfast in her desire to raise rates at least once in 2016 after the Fed initially targeted four hikes at the beginning of the year.

“If a Federal Reserve rate hike in December appears more probable after the US elections, prices are likely to further decrease slightly,” Commerzbank said in a note. “We do not expect any more pronounced price slide because the selling pressure from speculators is likely to abate and physical buying interest will doubtless pick up at lower prices.”

LME Week will start in earnest this weekend, with metal participants gathering in London to discuss recent trends. The recent price rises may boost sentiment after a tough year, market participants said.

Turning to European markets, Germany’s DAX fell 0.3%, while France’s CAC-40 was last up 0.3%. The dollar softened by 0.3% to 1.0926 against the euro.

In other commodities, light sweet crude (WTI) oil futures on the Nymex fell 42 cents or 0.8% to $49.30 per barrel, while Comex silver for December settlement was recently trading at $1,26.50 per oz., up $2.90.

(Editing by Tom Jennemann)