Comex copper recovers amid strong US jobs data

Comex copper prices bounced-back Wednesday, November 30 after spending early trading in negative territory with strong US data providing a lift to the entire base metals complex.

Copper for March delivery on the Comex division of the New York Mercantile Exchange rose 0.90 cents or 0.3% to $2.6190 per pound. Trade has ranged from $2.5505 to $2.6335.

Comex gold for December settlement dipped $7.20 or 0.6% to $1,183.60 per oz. Trade has ranged $1,181.20 to $1,196.80.

This morning, in a preview of the Friday’s jobs report, ADP non-farm employment change in November showed 216,000 Americans joined the labor market, besting the forecast of 161,000.

It’s yet another sign that the US economy is growing at a healthy clip heading into the Federal Open Market Committee (FOMC) in a few weeks. The policy-board is expected to raise rates next month, signaling that the economy is projected to expand for the ninth consecutive year.

“We are seeing a generally more positive tone in the base metals today, as buyers seemed to have re-emerged,” INTL FCStone analyst Edward Meir said. “Whether this is the start of another reliable “buy-the-dip” strategy or a bull trap remains to be seen.”

Chinese speculators were the principal drivers of the rally at the start of the week but reports that the Dalian and Zhengzhou exchanges will increase margins across a range of industrial and agricultural commodities from today dampened sentiment.

As well, the Shanghai Futures Exchange (SHFE) announced it will cap new positions of several steel rebar futures contracts to 8,000 lots per account for some non-hedging clients.

“As Chinese authorities try to rein in excessive speculation in areas such as property, huge amounts of cash looking for a home has been channelled into commodities and as these ‘overheat’ so exchanges are also forced to act,” Sucden said in a note.

The PBoC raised deposits for first-time buyers to 35% from 30% previously. Deposit requirements for second properties have also climbed to 70%.

In data today, the EU CPI flash estimate and the core CPI estimate were as expected at 0.6% and 0.8% respectively.

Here in the US, CORE PCE price index month-over-month in October was in-line with expectations at a 0.1% uptick, while personal spending and income grew at 0.3% and 0.6% respectively.

Market participants will now focus on upcoming Chinese manufacturing PMI and non-manufacturing PMI, while the US has PMI numbers, unemployment data and non-farm payroll data of note.

Turning to European markets, Germany’s DAX and France’s CAC-40 were up 0.2% and 0.6% respectively, while the dollar strengthened by 0.3% to 1.0624 against the euro.

In other commodities, light sweet crude (WTI) oil futures on the Nymex jumped $3.25 or 7.2% to $48.48 per barrel, while Comex silver for December settlement was recently trading at $16.730 per oz., down 10 cents

(Editing by Tom Jennemann)

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