Commodities have seen spectacular gains and copper prices, along with its related exchange traded fund (ETF) is still pushing higher. Still, copper is just as likely to dip down again as it is to jump higher in the new year.
Copper has hit a new 16-month high, and the metal is on course for the biggest annual gain – almost 140% – in more than two decades, comments Dian L. Chu for The Trading Report. The dollar rebound had little effect on copper as speculative buying and confidence has kept copper prices up. [Copper ETF soars as dollar bulls emerge.]
Copper is seen as a bellwether for the global economy. The metal is used in housing, power generation and other cyclical sectors. [Copper ETF spotlight.]
Many copper observers are confounded by copper’s rise in face of swelling inventories and signs of weak consumption. There are even some that are commenting on copper’s behavior, which is seen these days as being similar to that of gold. Still, factors like the anticipated global recovery, new investment cash, index/fund buying, weak U.S. dollar and labor disruptions have all helped push aside concerns over large copper inventories.