Copper gained in the early morning hours
After declining on August 1 and starting the week on a weaker note, copper prices recovered in the early morning hours on August 2. At 7:10 AM EST, the COMEX copper futures contract for September delivery was trading at $2.21 per pound—a gain of ~0.57%. The weaker dollar on Tuesday morning supported copper prices.
Manufacturing data from China raises demand hopes
The recently released Chinese manufacturing PMI (purchasing managers’ index) data decreased due to concerns about China’s copper demand. Even though the official PMI and Caixin PMI readings diverged, the Caixin manufacturing PMI released by Markit for July was 50.6—the first expansion since February 2016. On the other hand, the official Chinese manufacturing PMI for July was 49.9—below the market’s expectation of 50. This indicates a contraction in the manufacturing activity. Despite divergence, the PMI data placated the fears about sluggish demand from China—the biggest copper consumer.
On August 2, major copper producers Freeport-McMoRan (FCX), BHP Billiton (BHP), and Rio Tinto (RIO) fell 3.7%, 1.6%, and 0.43%, respectively. Glencore (GLNCY) remained unchanged. The SPDR S&P Metals & Mining ETF (XME) and the PowerShares DB Base Metals (DBB) fell 0.72% and 0.44%.
Gold and silver are stable in the early morning
After posting moderate gains on August 1 amid decreased chances of an interest rate hike by the Fed in the near term, gold gained in the early morning hours on August 2. Weakness in the global market on August 2 along with the weaker dollar supported gold. At 7:30 AM EST, the COMEX gold futures contract was trading at $1,363.85 per ounce—a gain of ~0.32%. Silver rose to a two-year high on August 1. At 7:30 AM EST, silver was trading at $20.71 per ounce—a gain of ~1.0%.
Read How Closely Are Miners Correlated with Gold? to learn about the correlation between the gold and miners. On August 1, precious metal producers Barrick Gold (ABX), Newmont Mining (NEM), Silver Wheaton (SLW), and Royal Gold (RGLD) gained 1.7%, 0.36%, 2.6%, and 1.6%, respectively. The SPDR Gold Trust ETF (GLD) gained 0.19%.