Copper futures have extended yesterday’s rally as hopes build for Chinese policy-makers to introduce further stimulus measures following a number of disappointing economic reports recently. Copper futures are up 70 points today, currently trading at $2.4225 per pound at New York’s Commodity Exchange.
The “soft-inflation” news earlier this week includes Chinese imports declining more than 20% last month. Plus, a slow-down of China’s domestic brands is indicating their broader economy is rather fragile and in need of further government stimulus. China is the biggest consumer of copper, and last year alone they accounted for nearly 40% of global consumption.
“The copper (futures) trade seems to be in a holding pattern until further supply/demand assessments can be made,” said Laura Taylor, a senior market strategist at RJO Futures in Chicago, sharing her fundamental assessment of the copper futures market. Taylor adds, “With one country accounting for nearly half of all global consumption last year, all eyes are on the Chinese government to see how they handle their economy.”
The trend for copper futures is down, however a bottom formation appears to be unfolding. A “double-bottom” that begins in late August and as late as the end of last month looks as if a base if forming, but copper futures will have to trade and follow-through above $2.50 for the trend to change direction.
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