The copper price hit an 18-month high on an intraday basis at the end of November, buoyed by a rebound in top consumer China and a hopes of stronger economic growth in the US.
But the metal has been mostly in retreat this month as doubts creep in about the impact of president elect Trump’s fiscal stimulus plans and a stronger dollar prompts profit-taking.
On Monday copper for delivery in March, the most active contract, declined 3.4% from Friday’s close to a low of $2.4775 per pound ($5,395 a tonne) on the Comex market in New York.
While continuing to reduce bullish silver, platinum and gold bets, on the copper futures market hedge funds have added to long positions – bets on higher prices in future – for six weeks in a row.
According to the CFTC’s weekly Commitment of Traders data up to December 13 so-called managed money investors have taken net longs to a fresh record high of just over 87,000 lots.
That’s the equivalent of 2.2 billion pounds or nearly 1 million tonnes and shatters the previous peak achieved mid-2014 when the copper price was above $3.20 a pound. The reversal in fortunes has left the metal exposed to profit-taking says Saxo Bank in a research note:
Source: Saxo Bank www.tradingfloor.com
Recent declines aside, after vastly underperforming other metals and steelmaking raw materials in 2016, copper’s enjoying a breakout fourth quarter with gains from six-year lows hit in January this year of nearly 28%.
