The Comex copper price built on the previous week’s momentum to set a three-week high Monday October 31 with positive US data offsetting a strengthening dollar.
Copper for December settlement on the Comex division of the New York Mercantile Exchange ticked up 0.20 cents or 0.1% to $2.1955 per pound. Trade could be shallow this week with a large host of market participants attending LME Week.
Comex gold for December delivery fell $2.80 or 0.2% to $1,274.0 per oz. Trade has ranged from $1,272.20 to $1,280.50.
The red metal spent the early part of October eroding to a multi-month low, but short-term sentiment has turned more positive recently amid solid manufacturing figures from the US, Europe and Asia
This wave of optimism continued Friday when stronger-than-expected third quarter advance US GDP data showed the world’s largest economy grew at 2.9%.
“Metal prices were driven up ahead of LME Week, the LME base metal index (LMEX) achieving a 15-month high of 2,487 points on Friday,” Commerzbank said. “Prices have found support of late from positive US economic data – the US economy recorded its strongest growth for two years in the third quarter.”
Still the greenback is keeping the commodities complex from a major upturn. After falling to a one-week low of 98.24 last Friday, the dollar index has since recovered to 98.58 on Monday, up 0.3% from its previous close. This has “generally kept the precious in check”, MKS Group said in a Monday note.
But the predominant issue is the US presidential election, which concludes next Tuesday after nearly two years of campaigning.
“Investors will pay close attention to the FOMC meeting over November 1-2, which should shed some light over future US monetary policy. The market sees the likelihood of rate increase in November at just 8.3% but at 68% in November,” Metal Bulletin analyst Boris Mikanikrezai said. “While we also see a December move as the likeliest scenario, we think that what matters for the future direction of gold prices is the longer-term path of the Fed funds rate rather than the precise timing.”
In today’s data, the focus remains on the US with core PCE price index, personal spending personal income and Chicago PMI all scheduled for release.
Following that, the macroeconomic news-flow will centre on the Chinese manufacturing PMI on Tuesday. Consensus is for Chinese factory activity to have remained in expansion mode in October, with the official manufacturing PMI expected at 50.3 and the Caixin manufacturing PMI at 50.2.
Meanwhile in European markets, Germany’s DAX and France’s CAC-40 were down 0.3% and 0.7% respectively, while the dollar strengthened by 0.4% to 1.0950 against the euro.
In other commodities, light sweet crude (WTI) oil futures on the Nymex slipped 57 cents or 1.2% to $48.13 per barrel, while Comex silver for December was recently trading at $17.830, up 3.4 cents.
(Editing by Tom Jennemann)