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Copper Prices Sound Like A Broken Record

Copper Prices Sound Like A Broken Record

by Jim Williams

Remember the saying, “You sound like a broken record”? Its origin is from the days of vinyl records – when the stylus on a record player encountered a crack, a scratch or a piece of dirt, it would get knocked into the previous groove, so the same little bit of music would play over and over and over. Well, that is kind of how it is with the price of copper.

China’s economy. The US Dollar. China’s economy. The US Dollar. China’s economy. The US Dollar.

When is someone going to come along and bump the record player and get the price out of this groove – and hopefully push it to finish the album with higher prices?

On Monday, copper prices fell 0.6% as investors weighed a weaker dollar against uncertainty over the stimulus efforts from China. “Some people are confused about China’s stimulus plans, and when traders are confused, they tend to pull the trigger,” George Gero, a senior vice president with RBC Capital Markets Global Futures, told the Wall Street Journal.

In early Tuesday trading in Europe, copper prices edged higher based on a disruption of mining output in Chile, Indonesia and Australia. Predictions about supply of the red metal have turned from a surplus at the start of 2015 to some now predicting a deficit later in the year. 

The Dollar pushed higher against the euro and the yen in early trading Tuesday as well – having regained almost all the ground lost after Friday’s unexpectedly weak U.S. jobs report when the Labor Department reported the U.S. economy added 126,000 new jobs in March, the smallest increase since December 2013.

Market experts believe that number makes it more likely that the Federal Reserve will wait until the end of the year to raise interest rates from record low levels. Investors had previously predicted that U.S. interest rates could start to rise as early as June.

China’s economy. The US Dollar. China’s economy. The US Dollar. China’s economy. The US Dollar.

Despite the broken record, copper prices are up almost 14% since hitting a recent low of $2.420 on January 26.

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