US copper futures pushed higher on Wednesday following a larger-than-forecast gain in US economic growth last quarter, traders said. Continued work stoppages at three of Chilean miner Codelco's copper mines kept support under prices, along with expectations that the Federal Reserve will trim key US interest rates this afternoon.
Newly-active July copper was up 1.45 cents at $3.8955 per lb on the Comex metals division of the New York Mercantile Exchange. The range spanned $3.8455 and $3.9090. Comex estimated 10:00 am EDT copper volume at 5,595 lots. Tuesday's final tally came to 19,862 contracts.
Open interest for copper futures fell 781 lots to 105,303 lots by the close of April 298. Copper gained after reports showed US gross domestic product grew by 0.6 percent in the first quarter, a slightly stronger pace than the 0.2 percent forecast by economists.
Though Q1 GDP came in stronger than expected, analysts said the large proportion of the increase coming from additions to inventories was misleading and underscores the deterioration in the US economy.
Offering a more positive view of the economy, US private-sector employers added 10,000 jobs in April according to a private report by ADP Employer Services. Copper seemed to shrug off a contraction in US Midwest business activity in April for a third straight month. The Chicago Purchasing Management Index was, however, slightly less weak than expected and higher then the last two readings.
Analysts said the regional monitor showed more continued weakness in the manufacturing sector, but noted that the new orders index in the report remain strong. Continuing strikes at three of Chilean copper giant Codelco's mines kept copper prices supported. Production at Teniente, the world's largest underground copper mine, remained halted for the second day.
Work strikes have shuttered smaller Andina and Salvador divisions for 15 days. Also underpinning copper, was the wide expectation the Federal Reserve will trim its target for short-term US interest rates by 25 basis points to 2.00 percent. Results of its policy-setting meeting are due around 1415 EDT.
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