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Copper Futures Rise to One-Week High as U.S. Economic Growth Tops Forecast
Copper rose to the highest price in a week after a report showed the economy in the U.S., the second-largest copper buyer after China, grew faster than forecast in the second quarter.
The gross domestic product expanded at a 1.6 percent annual rate from April through June, the Commerce Department said. That compares with the median estimate of 1.4 percent in a Bloomberg News survey of 81 economists. Federal Reserve Chairman Ben S. Bernanke said today the U.S. central bank “will do all that it can” to ensure a continuation of the economic recovery.
“Commodities are pretty happy today,” said Michael K. Smith, the president of T&K Futures & Options in Port St. Lucie, Florida. Copper will soon “break out to the upside” after trading mostly between $3.20 and $3.40 a pound for a month, Smith said.
Copper futures for December delivery rose 5.9 cents, or 1.8 percent, to close at $3.3845 a pound at 1:21 p.m. on the Comex in New York. Earlier, the price reached $3.405, the highest level for a most-active contract since Aug. 19. The metal added 2.2 percent this week, the biggest weekly gain in a month.
Commodities will move higher as the dollar continues to weaken, Smith said. Copper may reach $3.80 in a year, he predicted. The greenback has dropped 4.3 percent against a basket of six currencies since June 1. The Reuters/Jefferies CRB Index of 19 raw materials, up as much as 1.3 percent today, has gained 5.9 percent in the same period.
Some traders buy raw materials as the U.S. currency weakens to protect purchasing power.
On the London Metal Exchange, copper for delivery in three months gained $154.50, or 2.1 percent, to $7,459 a metric ton ($3.39 a pound).
Tin for three-month delivery climbed $290, or 1.4 percent, to $21,640 a ton, after reaching $21,750, the highest level since August 2008. Aluminum, zinc, lead and nickel also rose.
To contact the reporters on this story: Yi Tian in New York at Ytian8@bloomberg.net; Chanyaporn Chanjaroen in London at cchanjaroen@bloomberg.net.
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