Exclusive Features

Copper Soars to Highest In Nearly Three Years

By Jim Williams

Copper prices reached levels not seen since November 2014 on Monday. The red metal jumped nearly 2 percent higher on Monday as investors bet on further global economic growth.

Futures for September delivery inched over the $3 level – actually topping out at $3.0025 per pound. Playing on yesterday's total eclipse – the chart below shows the totality of copper's ride since November 2014.

Source: FactSet

Copper's latest surge is due in part to a weaker U.S. dollar, strong demand out of China, and continued talk of China possibly banning imports of scrap metal at the end of the year. Experts are betting that China's better-than-expected economic growth figures so far this year will translate into stronger demand for the red metal.

Trouble at the world's second largest copper mine is also playing a role in the price of the commodity.

Phoenix-based Freeport McMoRan has experienced significant issues at its Grasberg mine in Indonesia. From labor disputes and major layoffs earlier this year, to flash floods destroying roads, bridges and water lines at the mine last week. This past weekend, former workers at the mine clashed with Grasberg security. Reuters reports at least seven people were injured and dozens of vehicles and buildings were torched.

All of this, and their exporting license is due for renewal in October.

No word on what all of this will do to operations at Grasberg. We will keep an eye on the situation.

The Week Ahead
There is an unusual amount of events scheduled this week that will have an impact on the markets in general. Most of them will have direct implications on the price of copper as well.

Here is a complete list (compiled by investing.com) of key events happening this week:

Monday, August 21
Canada released data on wholesale sales.

Tuesday, August 22
The UK is to release data on public sector borrowing.
The ZEW Institute is to report on German economic sentiment.
Canada is to release data on retail sales.

Wednesday, August 23
ECB President Mario Draghi is to speak at an event in Germany.
The euro zone is to release data on manufacturing and service sector activity.
Dallas Fed President Robert Kaplan is to speak.
The U.S. is to release data on new home sales.

Thursday, August 24
The UK is to release revised data on second quarter growth.
The U.S. is to report on jobless claims and existing home sales.
Meanwhile, the annual meeting of top central bankers and economists in Jackson Hole will get underway.

Friday, August 25
The Ifo Institute is to report on German business climate.
The U.S. is to release data on durable goods orders.
ECB President Mario Draghi is to speak in Jackson Hole.

Further Reading
Click here to read more about the situation at the Grasberg mine, and to see what BHP Billiton, one of the world's largest copper miners, is doing to play it safe.



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