The three-month copper price edged $10.50 per tonne higher as it struggles to break back through the $6,500-per-tonne mark.
“The base metals remain in correction and consolidation mode as we approach the end of the quarter and the weakness does feel like profit-taking after strong rallies were seen over the summer,” William Adams, Metal Bulletin senior analyst said.
“China’s National Day Golden Week holiday also kicks off next week, so there may well be some book squaring ahead of that. Generally, we do see this weakness as consolidation within up trends – we would let the pullbacks run their course before looking for buying opportunities,” he added.
Nickel continues to look vulnerable; the metal’s three-month price edged up $40 this morning but still remains low at $10,280 per tonne. Zinc and lead prices also increased marginally but are little moved this morning.
“Rumours are circulating about sharp declines in SHFE stock levels at the end of this week. In addition, by the look of the volumes traded on the LME, it suggests that the markets have corrected a heavily-overbought situation across the board just leaving the question of where prices will be pushed towards for the month and quarter-end valuations this Friday,” noted Malcolm Freeman of Kingdom Futures.
The increased possibility of a US rate increase at the end of the year and strengthening dollar could check the upside for commodities prices, some market observers noted.
The dollar has continued to strengthen after Wednesday’s release of US president Donald Trump’s tax reform plan which included corporate and individual tax cuts and hawkish comments from US Federal Open Market Committee chairwoman Janet Yellen on Tuesday. Yellen had noted that it would be “imprudent” to keep monetary policy on hold until inflation reaches 2%, thus lending weight to the possibility of a US rate increase in December.
Copper little moved
Base metals prices
Currency moves and data releases