Copper Rebounds in New York, Snaps Four-Day Loss, on Greek-Aid Speculation
Copper prices rose, snapping four days of losses, on speculation that the European Central Bank will take bolder steps to stem the region’s debt crisis.
Goldman Sachs Group Inc. Chief Executive Office Lloyd Blankfein said he’s confident government leaders will find a way out of the budget crisis. German lawmakers today approved loans of as much as 22.4 billion euros ($28.6 billion) for cash- stricken Greece. An ECB spokesman declined to comment on the speculation.
“With talk of more aid going to Greece, some of the anxiety about that situation is cooling down today,” Donald Selkin, the chief market strategist at National Securities Corp. in New York. “I don’t think we’ll see copper return to a strong uptrend, but we’ll start to get a little support.”
Copper futures for July delivery added 2.75 cents, or 0.9 percent, to $3.1445 a pound on the Comex in New York. That’s the biggest gain for a most-active contract since April 13.
The metal is down 6.2 percent this week, the biggest slide since early February.
Concerns over Europe have been “shocking” the commodity markets, Brian Hicks, who helps manage about $1.5 billion at U.S. Global Advisors in San Antonio, said on May 4. The Reuters/Jefferies CRB Index of 19 raw materials is down almost 6 percent for the week, heading for the biggest loss since December 2008.
“The key concern is if the problems in Greece are going to spread,” said Dan Smith, an analyst at Standard Chartered Plc in London. “If you have a problem in Greece, that can impact European banks, which hold Greek bonds. Therefore, you get this knock-on effect.”
Prices were also buoyed today by a report that showed U.S. employment increased in April by the most in four years, easing concern the global recovery is slowing.
U.S. payrolls jumped 290,000 last month, the most since March 2006, the Labor Department said today. Manufacturers added the most workers to payrolls since August 1998. Copper prices more than doubled in 2009 as the global economy rebounded and demand for raw materials increased.
“The jobs report was very strong, especially the manufacturing sector, which is positive for copper,” said Selkin of National Securities. “We should see some kind of stabilization in prices.”
On the London Metal Exchange, copper for delivery in three months fell $3 to $6,845 a metric ton ($3.15 a pound). Aluminum, tin and zinc also dropped. Nickel and lead gained.