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Copper Comes Back – Focus Turns to Federal Reserve

By Jim Williams

For the second week in a row, the price of copper took an upturn to start the week. Let's see if the rally can continue this time.

Despite the positive start last week, the red metal finished down as a whole. In fact, it was the second straight 'negative' week for copper. The two-week dip followed eight weeks of positive gains. One of the main reasons for this week's shift to start the week is the fact the dollar dipped back down below 92.00.

Copper fell last week after inventories in LME-registered warehouses saw their biggest weekly inflow since May, increasing 95,925 tons between September 12 and 15. Prices were also pressured last week by disappointing data from China, including its slowest growth in investment in nearly 18 years.

While the sky isn't falling, one analyst says the recent trend in copper may suggest investors look elsewhere.

“If you're currently long copper, you might want to take those positions off and look to reallocate in other safe haven metals, like gold, silver, platinum, palladium. But the copper market, I think, has definitely peaked,” Phil Streible, senior market strategist at RJO Futures said on CNBC's “Trading Nation.”

Chances are, if you are reading this article, you have a vested interest in copper and know the roller coaster ride it provides – not just weekly, but sometimes daily, heck, even hourly. It could depend on what is hot (or not) in the markets. From China, to North Korea to the aforementioned dollar.

Well, the next two days the focus is on the Fed. The Federal Open Market committee started its 2-day September meeting today. Will they pull the trigger on the third rate hike of 2017? Will the Bank announce what it will do with its $4.4 trillion balance sheet?

“I do not think the Fed will act,” writes frequent tED contributor Andrew Hecht of Seeking Alpha. “In fact, I believe that the statement from the central bank that follows the meeting will be more dovish than recent statements. If the Fed acts at all this year, the hike is likely to come at the December meeting.”

You can get all of Andrew's thoughts in his Seeking Alpha article The Fed – Will They or Won't They

Here is another article on the Fed's meeting. This one is from the Business Insider: The Fed is getting ready for its 'biggest meeting of the year'.

We will keep an eye on what the Fed will do and report it here.

Random Copper Find
Here is a little something we stumbled across while digging for copper info. You have seen copper charts before, but have you seen one spanning 45 years? Click on the image below to visit Macrotrends.net and check out the interactive chart of copper dating back to 1971.

 

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