Thursday, November 27, 2014, Copper futures bounced off of an eight-month low after policymakers speculated the introduction of further stimulus measures around the globe to support the global economy and increase growth.
Copper for March on the Comex division of the New York Mercantile Exchange delivered 0.6 cents, 0.21% to trade at $2.963 a pound during the Euro morning hours. Copper prices on Wednesday fell to $2.935 a pound, the lowest they’ve been since the 19th of March. They eventually settled at $2.956. With copper’s importance to the industrial market, anxiety was at an all-time high as the stability of the global economy took a dramatic swing.
Futures were anticipating support at Wednesday’s low of $2.935, and resistance at Tuesday’s high of $3.024. The European Central Bank is expected to install measures for additional stimulus to kick-start growth and inflation in the euro arena. ECB vice president, Vitor Constancio, stated that the central bank plans on quantitative easing sometime around the first quarter of 2015. Cover bonds and asset-backed securities are being purchased as part of the ECB’s current stimulus plan, even as markets keep a fixed eye on government debts.
Europe holds the third largest global demand for copper for industrial use. With the U.S. markets in their holiday hiatus, trade volumes remained light as expected. Durable goods moved up as were forecasted, while core durable goods broke the mold with a surprise fall. Further reports showed Chicago-area manufacturing slowing and mixed reviews from the housing sector. The final reports show the U.S. recovery continuing at a slow but steady pace.
Other precious metals on the Comex remain vulnerable in the near-term given the steady U.S. economic recovery forcing the Federal Reserve to potentially raise interest rates sooner than expected at far quicker rates. But much remains to be seen after the Thanksgiving holiday.
