Comex copper price ascends to fresh high

The Comex copper price reached the highest level since March Monday, November 7, amid increased speculative buying and declining London Metal Exchange (LME) stocks.

Copper for December settlement on the Comex division of the New York Mercantile Exchange rose 2.35 cents or one percent to $2.2885 per pound. Earlier, the contract touched $2.3125, the highest point since March 20.

Comex gold for December delivery fell $17.40 or 1.3% to $1,287.10 per oz. Trade has ranged from $1,284.10 to $1,296.50.

Bullish investor sentiment has returned to the base metals space with Comex non-commercials showing a 25,052 contract increase in copper net-long positions as of November 1, according to the latest Commodities Futures Trading Commission data.

Net-longs now stand at the highest point since July 2014, representing a shifting view in the copper industry after last week’s optimistic LME Week meeting.

After declining 14% in October, LME stocks have continued to drawdown and now stand at 298,400 as of November 4 – down 22,425 tonnes or 7% from the previous week.

“Over a 1-3 month view, we remain cautious – we think that copper’s rise is not fundamentally driven but is instead supported by speculative buying due to stronger commodities, a weaker dollar and a fall in copper inventories,” Metal Bulletin analyst Boris Mikanikrezai said. “We think prices are vulnerable on the downside because a supply response will emerge should prices remain above $5,000 and the short-covering rally in copper is close to be exhausted.”

Investors are now awaiting the results of the US presidential election on Tuesday. In the interim, the dollar index fell to a three-week low of 97.18 on Thursday but has since recovered to 97.64, up 0.72% from its previous close.

National polls released Monday morning showed Hillary Clinton held a minor lead over republican candidate Donald Trump, but the contentious election season has maintained increased safe-haven buying.

ETF investors have generally remained committed although some selling has been seen, holdings remain at 2,172 tonnes, just below the highs of the year at 2,174 tonnes.

“If Hillary Clinton were to come out on top, the gold price would probably continue to fall as a Fed rate hike in December would then be fully priced in,” Commerzbank noted.

In data today, the EU retail PMI was on target at 48.6 while Sentix investor confidence beat expectations at 13.1. Later, the EU will release retail sales numbers.

Here in the US, labor market conditions, loan officer survey and consumer credit are slated for release.

Meanwhile in European markets, Germany’s DAX and France’s CAC-40 were both up 1.6%, while the dollar strengthened by 0.8% to 1.1060 against the euro.

In other commodities, light sweet crude (WTI) oil futures on the Nymex gained 50 cents or 1.1% to 44.57 per barrel, while Comex silver for December settlement was recently trading at 18.175 per oz., down 19.6 cents.

(Editing by Tom Jennemann)

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