- Volume 55 percent below 100-day average, Comex data show
- Pending home sales, rising China profits signal better outlook
Copper futures had the biggest gain in six sessions as economic indicators in the U.S. and China boosted demand prospects, while a weaker dollar made commodities cheaper in other currencies.
In China, industrial companies’ profits climbed 4.8 percent from a year earlier, snapping a seven-month losing streak in the first weeks of this year, government data show. In the U.S., the second-largest copper user, contract signings for home sales climbed 3.5 percent in February, beating the median estimate of 1.2 percent in a Bloomberg survey of economists. The Copper Development Association in New York estimates construction accounts for about 40 percent of the metal’s use.
“The fundamentals have been bad for a while, and we’re just starting to see these better numbers now,” Peter Thomas, a senior vice president at Zaner Group LLC, a metals broker in Chicago, said by telephone.
Copper futures for May delivery gained 0.8 percent to settle at $2.246 a pound at 1:13 p.m. on the Comex in New York. A gauge of the dollar snapped a six-day rally as traders weighed the potential for the Federal Reserve to raise interest rates.
Aggregate trading volume was about 55 percent below the 100-day moving average for that time of day, according to Comex data compiled by Bloomberg. The London Metal Exchange is shut for a public holiday.
Despite the recent rally, copper is still down 19 percent in the past year. Even money managers who started betting on a copper rally barely a month ago are already on the retreat, paring their net-long positions for a second straight week. More than 4.5 million metric tons of additional mine capacity is planned to come online by 2020, according to Bloomberg Intelligence.
“The reduction in volume is because some technical traders still don’t see the underpinning as positive,” Thomas said.