Comex copper price inches higher, dollar softens

The Comex copper price on Wednesday December 7 erased yesterday’s downturn, although the metal remains in consolidation mode with investors seeking fresh catalysts.

Copper for March delivery on the Comex division of the New York Mercantile Exchange rose 1.10 cents or 0.4% to $2.6910 per lb. Trade has ranged $2.6565-2.7070.

Comex gold for December settlement gained $3.70 or 0.3% to $1,173.80 per oz. Trade has been narrow at $1,167.20-1,176.20.

Metal prices have been stagnant over the past few weeks after surging to the highest point since June 2015 on a wave of speculative buying.

But business has been thin – the fund activity which had spurred prices higher in recent weeks seems to have calmed, in particular from the Chinese fund community.

“We are now constructive on a 1-3 month horizon given our view that the ‘catch-up’ trade can continue, especially if investors turn increasingly optimistic at the global macro level,” Metal Bulletin analyst Boris Mikanikrezai said. “Still, we expect selling pressure to return with a vengeance late in the first quarter of 2017 because of stronger supply.”

In data, Chinese trade balance is tentatively scheduled for later today and is forecast at 307 billion – should the data be on target it would take the reserves back down to 2011 levels.

“But, it is the speed of the current decline that upsets Chinese regulators. The regulations so far have put the burden on to banks who in a convoluted know your customer (KYC) process have to confirm that the capital transmission is for a permitted purpose. This has led to an inconsistent and patchy application of the new rules,” John Browning at Bands Financial said.

In the USA, Jolts job openings, crude oil inventories and consumer credit are all slated for release later today.

Turning to European markets, Germany’s DAX and France’s CAC-40 were up 1.3% and 0.6%, respectively, while the dollar softened by 0.2% to 1.0734 against the euro.

In other commodities, light sweet crude (WTI) oil futures on the Nymex slipped 60 cents or 1.2% to $50.33 per barrel, while Comex silver for December settlement was recently trading at $16.850 per oz, up 4 cents.

(Editing by Wei Jun Lau)

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