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Copper, Gold, and Silver Are Stable Early on October 7

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Copper is stable in the early hours

After falling for four consecutive trading days, copper prices are stable in the early hours on October 7. At 6:35 AM EST on October 7, the COMEX copper futures contract for December delivery was trading at $2.15 per pound—a fall of ~0.12%.

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Why is copper weaker this week?

Copper has been weaker this week due to the stronger dollar and lower volumes. Better-than-expected US economic data such as US consumer sentiment, ISM manufacturing data, and jobless claims data supported the US dollar. According to the data released by the US Department of Labor on October 6, jobless claims fell by 5,000 to 249,000 last week—the lowest level since April and the second-lowest level since 1973. Higher expectations of an interest rate hike in 2016 also strengthened the US dollar. The firmer dollar weighs on dollar-denominated commodities such as crude oil, copper, and gold. China’s market is closed this week due to “Golden Week” from October 1–7. As a result, traded copper volumes are thin.

On October 6, major copper producers Freeport-McMoRan (FCX), Glencore (GLNCY), BHP Billiton (BHP), and Rio Tinto (RIO) fell 3.5%, 0.83%, 0.64%, and 1.6%, respectively. The SPDR S&P Metals & Mining ETF (XME) and the PowerShares DB Base Metals (DBB) fell 0.35% and 0.36%.

Gold and silver are stable in the early hours

Gold and silver are stable ahead of the US non-farm payrolls data and unemployment data. The data are scheduled to release at 8:30 AM EST on October 7. At 6:40 AM EST on October 7, the COMEX gold futures contract for December delivery was trading at $1,258.65 per ounce—a gain of ~0.45%. The COMEX silver futures contract for December delivery gained ~0.18% and trading at $17.38. On October 6, precious metal producers Barrick Gold (ABX), Newmont Mining (NEM), Silver Wheaton (SLW), and Royal Gold (RGLD) fell 2.4%, 1.6%, 1.9%, and 4.8%, respectively. The SPDR Gold Trust ETF (GLD) fell 0.94%.

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