Copper gave up the gains
Copper gained 2.1% on Wednesday, June 15, 2016, the biggest one-day surge since March, but gave up all its gains on Thursday. At 2:27 PM EDT on Thursday, COMEX copper was trading at ~$2.06, a drop of ~1.8%. Concerns over the Brexit vote have been weighing on copper since the beginning of this week.
Oil and dollar weigh on copper
On Thursday, the drop by crude oil and the slightly stronger US dollar weighed on copper prices. The stronger dollar generally weighs on dollar-denominated commodities like copper and pressures their prices.
In addition to this, the lack of positive signs of an increase in copper demand, especially from China, is also behind the weak sentiment on Thursday. Considering the fact that China, copper’s biggest consumer, accounts for more than 45% of total copper demand, the string of recent disappointing economic data from China weakened the hopes for healthy demand.
New loan data failed to support copper as Brexit overshadows
Although the new loan data released on Wednesday was better than expected, it failed to carry on the support amid the weak global economic situation. According to data released by the Peoples Bank of China (or PBOC), the total volume of new loans in May surged to 985.5 billion yuan (~$150 billion), which is better than the Market’s expectations of 750 billion yuan.
The rise in economic concerns amid the Brexit vote concerns overshadowed this data and pushed copper to an intraday low of ~$2.04 per pound on Thursday—the lowest level traded this week.
At 2:40 PM EDT on Thursday, major copper producers Freeport-McMoRan (FCX) and BHP Billiton (BHP) fell by ~3.3% and 0.63%, respectively. Glencore (GLNCY) and Rio Tinto (RIO) rose by ~3.4% and 0.34%, respectively.
The base metal–related SPDR S&P Metals & Mining ETF (XME) fell by ~1.4%. The following article explains the performance of gold and silver on June 16.