After taking a spill in recent months, copper prices and exchange traded funds (ETFs) are back at five-week highs. But can we really call it a comeback?
- First came a vote of confidence from Freeport-McMoRan Copper & Gold Inc. (NYSE: FCX), the world’s biggest publicly traded producer, said the metal’s outlook is “positive.”
- The statement came on the heels of strong earnings. Millie Munshi and Anna Stablum for Bloomberg report that the company reported second-quarter profit that topped analyst estimates. Prices have dropped 7.6% this year on concern that slowing economic growth would take away demand. [Copper and Nickel ETFs: Higher Prices Soon?]
- Reuters reports that Chinese demand is up, too. The country is buying again, draining supplies and pushing up prices.
- Some feel that the prices are just low enough to renew demand outside of China, too.
One point of caution, though, is the U.S. dollar. Anna Stablum and Nicholas Larkin for Bloomberg report that gains by the dollar make metals priced in the currency more expensive in terms of other monies, which may also affect the demand curve.
- iPath DJ-UBS AIG Copper ETN (NYSEArca: JJC)
- First Trust ISE Global Copper (NASDAQ: CU)
- Global X Copper Miners ETF (NYSEArca: COPX)
Tisha Guerrero contributed to this article.
The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.