Comex copper rally halts, Fed statement due later

Comex copper prices returned to negative territory Wednesday, November 2, amid investor reassessment after rallying to a multi-week high.

Copper for December settlement on the Comex division of the New York Mercantile Exchange fell 1.20 cents or 0.5% to $2.2170 per pound. Trade has ranged from $2.2065 to $2.2365.

Comex gold for December delivery rose $11.70 or 0.9% to $1,299.70 per oz. The contract is now trading at the highest point since October 3.

Base metals have seen a broad-based recovery over the last two weeks after US, European and Asian manufacturing figures bested expectations. In China, yesterday’s PMI data showed the manufacturing sector was expanding at the fastest pace in two years.

But trading remains shallow with market participants in London for LME Week.

“Stronger data from China has given copper a significant boost,” Metal Bulletin James Moore said. “But whether the momentum is sustainable or is merely an LME Week-related boost remains to be seen, particularly with wider risk markets under pressure.”

Here in the US, market participants will focus on the outcome of the US Federal Open Market Committee (FOMC) meeting and its statement later today although most do not expect it to announce a rate change.

With the presidential election less than one-week away, prediction markets expect the policy-board waits until December before resuming rate normalisation.

Gold has benefitted from recent polling that showed Donald Trump gaining on Hillary Clinton, resulting in a dollar selloff – the greenback was last trading down 0.4% to 97.37 on the dollar index.

“The Fed is likely to leave interest rates unchanged today and initially to await the outcome of next Tuesday’s US elections,” Commerzbank said. “Current polls show that the Republican presidential candidate Trump has been able to significantly narrow the lead of his Democrat rival Clinton.”

Later today, US ADP non-farm employment change and crude oil inventories are slated for release.

Meanwhile in European markets, Germany’s DAX and France’s CAC-40 were down 0.7% and 0.6% respectively, while the dollar softened by 0.4% to 1.1093 against the euro.

In other commodities, light sweet crude (WTI) oil futures on the Nymex fell 59 cents or 1.3% to $46.08 per barrel, while Comex silver for December was recently trading at $18.600 up 18.2 cents.

(Editing by Tom Jennemann)

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