Copper inched higher on November 23
After posting moderate gains on November 22, 2016, copper prices strengthened on November 23. At 1:15 PM EST on November 23, COMEX copper futures contracts for December delivery were trading at $2.61 per pound, a surge of ~2.6%.
Improved sentiment amid stronger global manufacturing data
The better-than-expected manufacturing PMI (purchasing managers’ index) data released on November 23 pushed copper prices higher. The stronger Eurozone manufacturing PMI data released in the morning, following by upbeat US manufacturing data, triggered buying into copper.
According to the data released by Markit, the Eurozone manufacturing PMI for October rose to 53.7, better than the market’s expectation of 53.3 and also better than September’s value of 53.5. Following the release of these data, Markit released the US Manufacturing PMI, which was 53.9 for October. This value was better than the market’s expectation of 53.4.
Stronger demand hopes support prices
Stronger domestic demand signals from China and expectations of rising US infrastructural spending under a Donald Trump presidency are supporting copper prices. Copper started the week on a positive note due to positive sentiments, rising 6% in the first three days.
After reaching a 17-month high, copper prices have pulled back in the last week amid profit-booking and speculation about the sustainability of the rally. However, prices have regained strength this week due to increased buying by Chinese investors. Since the beginning of November, copper has risen ~18%, and it’s heading toward its biggest monthly gain in a decade.
At 1:30 PM EST on November 23, 2016, major copper producers Freeport-McMoRan (FCX), Glencore (GLNCY), BHP Billiton (BHP), and Rio Tinto (RIO) had risen ~8.1%, ~0.71%, ~0.94%, and ~0.51%. The base metals–related SPDR S&P Metals & Mining ETF (XME) and the PowerShares DB Base Metals ETF (DBB) had risen ~0.32% and ~2.4%, respectively.
In the next article, we’ll discuss the performance of gold on November 23.