Copper may rise as manufacturing speeds up in China, the world’s biggest consumer of the metal, and the dollar weakens, a survey showed.
Ten of 14 analysts, investors and traders surveyed by Bloomberg, or 71 percent, said the metal will gain next week. Three predicted lower prices and one forecast little change. Copper for delivery in three months was up 6 percent for this week at $8,730 a metric ton at 3:30 p.m. yesterday on the London Metal Exchange.
Prices yesterday reached the highest level since Nov. 12 after figures showed on the prior day that manufacturing accelerated in China for a fourth month. The U.S. Dollar Index’s 14-day relative strength index this week rose above 72, exceeding the level of 70 that signals a potential impending drop to some analysts who study technical charts.
“We expect copper prices to increase due to positive economic news from China and a resumption of dollar weakness,” said Charles Bradford, a partner at Affiliated Research Group LLC, a New York-based consulting firm.
The RSI measures whether an index, security or commodity is overbought or oversold. The euro will rise to 1.32 per dollar in a week, according to forward contracts tracked by Bloomberg, representing a 0.3 percent gain on Dec. 2 levels.
The red bars on the attached chart are derived by subtracting bearish forecasts from bullish estimates, with readings below zero signaling the majority of respondents expect a decline. The green line shows the copper price. The survey data shown are as of Nov. 26.
The weekly copper survey has forecast prices accurately in 53 of the past 114 weeks, or 46 percent of the time.
This week’s survey results: Bullish: 10 Bearish: 3 Hold: 1