Copper price dips; disappointing US jobs data ends rally

Comex copper prices retreated from a two-week high on Thursday January 5 after the release of forecast-missing US jobs data, although the market is still well positioned after a series of strong manufacturing figures.

Copper for March delivery on the Comex division of the New York Mercantile inched 0.35 cents or 0.1% lower to $2.5530 per pound. Trade has ranged from $2.5455 to $2.5885 so far today.

Comex gold for February settlement rose $11.40 or 1% to $1,176.70 per oz. The precious metal, which has rallied for a third day, is trading at its highest since early in December.

In a preview of Friday’s jobs report, the US ADP non-farm employment change showed only 153,000 Americans joined the labour force in December, below the forecast of 171,000.

Overall, the US economy is on a solid footing – unemployment is below 5%, wages are rising modestly and stock markets are at record levels. 

Still, there is uncertainty related to the forthcoming presidential inauguration and exactly what policies president-elect Donald Trump will enact once in office.

“Given the good economic data, we remain mildly bullish for the industrial metals because demand looks set to improve. But we are wary that the metals may be running into a politically generated storm in the weeks ahead and there may well be some risk-off times later in the month,” Metal Bulletin analyst William Adams said. 

“So for now we would run with the trend but be prepared for setbacks,” he added.

In US monetary news, the Federal Reserve’s December meeting revealed some conflict among members over pace at which the central bank might raise interest rates. 

The Fed has said that the pace would be “gradual”, but several Fed officials highlighted risks that, if realised, could “call for a different path of policy than the currently expected”, the minutes read.

In other data, Challenger job cuts year-over-year in December rose 42.4%, a major miss from the expected mark of -13%. 

Later today, the US final services PMI, the ISM non-manufacturing PMI along with crude oil and natural gas inventories are all set for release. 

Turning to European markets, Germany’s DAX and France’s CAC-40 were each down 0.2%, while the dollar softened by 0.4% to 1.0534 against the euro. 

In other commodities, light sweet crude (WTI) oil futures on the Nymex ticked up 13 cents or 0.3% to $52.46 per barrel, while Comex silver for March settlement was recently at $16.445 per oz, up 3.6 cents.

(Editing by Mark Shaw)

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