SINGAPORE, Oct 29: London copper traded little changed on Monday, holding above 7-week lows plumbed last week, as the prospect of a recovering U.S. Economy underpinned prices, although concerns about leadership change and global growth kept a lid on gains.
The U.S. Election on Nov. 6 and the first stage of China’s leadership transition on Nov. 8 have kept traders cautious, with investors torn between signs of stable U.S. Growth and caution over the global corporate earnings outlook.
‘People can’t really see much optimism out there. We wanted the U.S. Corporate earnings to be a little more robust,’ said Jonathan Barratt, chief executive of Barratt’s Bulletin, a Sydney-based commodity research firm.
‘We’ve got the Nov. 6 election and the market will focus on who will get in, so we will see a negative to range bound market before then,’ he added.
Three-month copper on the London Metal Exchange climbed to $7,826 a tonne by 0343 GMT, up 0.13 percent from the previous session when prices finished flat.
Copper on Friday touched its lowest since Sept. 7 at $7,756.25 a tonne. Prices fell 2.4 percent last week in their largest weekly fall in four months, having been up nearly 11 percent for the year at one point in September. Copper is currently up 3 percent for the year.
The most-traded February copper contract on the Shanghai Futures Exchange rose 0.42 percent to 56,920 yuan ($9,100) a tonne.
Asian shares edged higher on Monday as investors took comfort in signs of stable growth in the United States, though caution over the uncertain global corporate earnings outlook capped prices.
Weekend data from China showed industrial profits rose 7.8 percent in September from a year earlier to 464.3 billion yuan ($74 billion), up from a 6.2 percent drop in August, while markets continue to eye the U.S. Election outcome.
‘Given Obama’s regulatory stances, an Obama victory would likely be interpreted bearishly by financial markets, and could have a modestly negative impact on job growth and corporate investment in Q4 2012,’ said Jason Schenker at Prestige economics.
Still a resolution to uncertainty and further green shoots suggesting a recovery is sprouting could help metals prices rally into the end of the year, INTL-FC Stone said in a note.
Figures that could impact metals prices later this week include China’s official purchasing managers index for September on Thursday and US jobs figures for October on Friday.
SPECS EXIT
For now, speculators continue to exit long copper positions with signs of fresh short positions emerging in China.
Bullish bets on U.S. Commodities by hedge funds and other big speculators have fallen to a near 2-1/2 month low, trade data showed on Friday, as oil and gold saw heavy selling for a second straight week.
SHFE figures paint a similar picture, notes Standard Bank, as open interest last week gained 6.9 percent while prices for the January 2013 contract fell by just over 2 percent.
‘This suggests bears are in the ascendancy, in China at least, even amid a market often dominated by a large day-trading population,’ it said in a note.
(agencies)
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