Copper fell on October 6
After falling for three consecutive trading days, copper prices were weaker on October 6. At 1:30 PM EST on October 6, the COMEX copper futures contract for December delivery was trading at $2.17 per pound—a fall of ~0.39%.
Stronger dollar weighs on copper prices
The stronger dollar weighed on copper prices on October 6. Since the beginning of the week, copper prices have been weaker. The fall in volumes traded along with the stronger dollar made copper fall to two-week low price levels. China’s market is closed this week due to “Golden Week” from October 1–7. As a result, traded copper volumes are thin. The dollar gained strength due to speculations about an interest rate hike by the end of 2016. The dollar has also gained strength from better-than-expected ISM manufacturing data and US consumer sentiment data.
According to the data released on October 3, the ISM manufacturing data rose to 51.5 in September from 49.4 in August. The data strengthened the US dollar. A firmer dollar weighs on dollar-denominated commodities such as crude oil, copper, and gold. On the other hand, the sentiment in the copper market is positive. It’s supporting the prices. The improvement in property market trends in China along with better-than-expected economic data releases improved the sentiment in the copper market.
At 1:50 PM EST on October 6, major copper producers Freeport-McMoRan (FCX), Glencore (GLNCY), BHP Billiton (BHP), and Rio Tinto (RIO) fell ~2.7%, ~0.83%, ~0.68%, and ~1.6%, respectively. The SPDR S&P Metals & Mining ETF (XME) and the PowerShares DB Base Metals (DBB) fell ~0.43% and ~0.42%.
In the next part, we’ll discuss how gold and silver performed on October 6.