Comex copper price edges higher, dollar keeps pace

Comex copper prices were on pace to end the Monday session in positive territory for the first time in two weeks, although the stronger dollar and questions over global demand is preventing a major rebound.

Copper for December settlement on the Comex division of the New York Mercantile Exchange rose 0.50 cents or 0.2% to $2.0935 per pound. The contract had ended lower on the nine previous trading days.

“While there has been a series of lower lows and lower highs on the charts the December contract appears to be attempting to forge a quasi-consolidation pattern around but mostly below the $2.10 level,” The Hightower Report said in a daily note.

Earlier, China’s CB leading index was a better-than-expected at 1.1%. China’s top officials will start their four-day annual plenum today; markets will look to see how President Xi Jinping plans to shape the Chinese economy, particularly with several Politburo standing committee members due to retire next year.

The yuan earlier dropped to a six-year low this morning amid growing concerns of Chinese debt. Concerns about the health of the Chinese economy emerged last week despite GDP growth of 6.7% in the third quarter.

The positive CB leading index helped to support the base metals complex after it was universally pressured lower by a stronger dollar. The greenback was recently trading 0.2% stronger at 98.79 on the dollar index – around the highest point since March and another headwind for a sustained commodities recoery.

On the macro front, investors will scrutinise the release of third-quarter US GDP growth on October 28 – consensus is for 2.5% quarter-on-quarter after 1.4% in the previous quarter and 0.8% in the first. Any deviation is likely to affect US monetary policy, the dollar and global risk sentiment.

In data, Japan’s PMI reading showed manufacturing activity expanded in October at its fastest pace in nine months – it rose to 51.7.

The eurozone’s flash manufacturing PMI and flash services PMI were both better than expected at 53.3 and 53.5 respectively and the US flash manufacturing PMI was also better than the forecast at 53.2.

Turning to American markets, the Dow Jones industrial average and S&P were both up 0.4%, while the dollar strengthened by 0.1% to 1.0879 against the euro.

In other commodities, light sweet crude (WTI) oil futures on the Nymex declined $1.00 or two percent to $49.86 per barrel, while Comex gold for December settlement was recently trading at $1,263.80 per oz., down $3.90.

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