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Copper: Keeps Bouncing Back

Copper: Keeps Bouncing Back

What a difference a week makes. Copper continues to play with our emotions going back and forth like a never-ending yo-yo. Last week at this time copper had dipped to near two-month lows. Then, the red metal turned things around and posted an impressive 6.21% gain to end the week – its highest level since early January. A weaker dollar gets the credit for the swing in fortune for copper.

The Chinese New Year and Presidents Day here in the states have made this week relatively uneventful so far. We did see copper drift a little lower in overnight trading, as the dollar tries to rebound – pulling ahead from a three-year low to start the week. Copper on the London Metal Exchange eased for a second day, dropping 0.3 percent to $7,096.50 a ton, having touched its highest in a month on Friday at $7,253.00.

“Copper has been in bullish mode for more than two years, and the current environment is not overly bearish from a fundamental, supply and demand perspective,” states Andrew Hecht of Seeking Alpha. “Additionally, the longer-term picture for the red metal remains positive and the lower price (last week) offered another opportunity for investors and traders before another leg to the upside in copper that could take the nonferrous metal to another new high.”

In the week ahead, investors will focus on minutes of the Fed’s latest policy meeting with hopes the central bank will give more hints on the pace of future rate hikes this year. A report on existing home sales in the U.S. will be the highlight of the holiday-shortened week. Plus, the Lunar New Year holiday comes to a close and markets resume trading Thursday.

Investing.com has compiled a list of these and other significant events likely to affect the markets this week.

Tuesday, February 20
Markets in China will remain closed for the Lunar New Year holiday.
The Reserve Bank of Australia is to publish the minutes of its latest policy setting meeting.
The ZEW Institute is to report on German economic sentiment.
Bank of England Governor Mark Carney, along with other officials, is to testify on inflation and the economic outlook before Parliament’s Treasury Committee.
Canada is to publish data on wholesale sales.

Wednesday, February 21
Markets in China will be shut for the Lunar New Year holiday.
Australian is to publish data on construction work done and wage inflation.
The euro zone is to release data on manufacturing and service sector activity.
The UK is to publish its latest employment report.
The U.S. is to produce figures on existing home sales. Later in the day, the Fed is to publish the minutes of its latest policy setting meeting.

Thursday, February 22
The Ifo Institute is to report on German business climate.
The UK is to release revised data on fourth quarter growth along with preliminary data on business investment.
The European Central Bank is to publish the minutes of its latest policy setting meeting.
Canada is to produce data on retail sales.
The U.S. is to publish the weekly report on jobless claims.

Friday, February 23
New Zealand is to publish data on retail sales.
The euro zone is to release revised inflation data.
Canada is to wrap up the week with its monthly inflation report.

Further Reading
Check out this Financial Times article talking about copper investors benefiting from the boom in electric cars.

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Jim Williams

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