Comex copper price starts week on soft footing; gold steady
The Comex copper price was in negative territory at the start of the trading week despite booming crude oil prices and a softer dollar – market attention is fixed on the Fed’s meeting this week and the likelihood it will raise interest rates.
Copper for March delivery on the Comex division of the New York Mercantile Exchange slipped 1.15 cents or 0.4% to $2.6360 per pound. Trade has ranged from $2.6145 to $2.6850 so far on Monday December 12.
Comex gold for February settlement, meanwhile, inched $1.20 or 0.1% higher to $1,163.10 per oz. Trade has been narrow between $1,152.50 and $1,163.0.
Copper has declined for four consecutive sessions but it remains confined to the range it established at the start of November.
This is in contrast to Brent crude oil, which jumped to a high of $56.83 per barrel this morning, its highest since July 2015, after some non-OPEC oil-producing countries agreed a production cut. But this has not spilled over to other commodities.
“In terms of our outlook, although the metals group seems to be relatively resilient, we think the market is in consolidation mode and not likely to start another push higher,” INTL FCStone analyst Edward Meir said.
“The current spike in oil and a stronger dollar, coupled with increasing pressure in the Chinese financial markets (ranging from a weaker currency, tighter local credit conditions and more heavy-handed government intervention) should make Chinese funds more reluctant to initiate a fresh round of aggressive buying at this stage,” Meir added.
The main focus this week is the two-day Federal Open Market Committee (FOMC) meeting that starts tomorrow. The US central bank’s policy board is widely expected to raise interest rates for the first time in a calendar year after strong labour and manufacturing data.
“Strength in other markets and the dollar continue to weigh on the precious metals. Gold prices have set a fresh pullback low at $1,154.55 per oz; the rest are holding up better, with palladium prices consolidating in high ground,” Metal Bulletin analyst William Adams said.
“With the FOMC decision on Wednesday, we wait to see how much of the rate rise, assuming there is one, is already discounted in the gold price,” he added.
In data, Chinese industrial production, fixed asset investment and retail sales are set for release later today.
Turning to European markets, Germany’s Dax was down 0.2% while France’s CAC-40 was unchanged. The dollar softened by 0.5% to 1.0609 against the euro.
In other commodities, light sweet crude (WTI) oil futures on the Nymex jumped $2.00 or 3.9% to $53.50 per barrel, while Comex silver for March settlement was recently trading at $17.100 per oz, up 13.3 cents.