Copper exchange traded funds rallied Monday for the second straight day on optimism over European Union summit talks and bullish manufacturing data from China.
Copper was on track for its biggest two-day rally since March 2009, Bloomberg reported.
“Most markets seem to be relieved by the progress made over the weekend by European leaders,” said Edward Meir, senior commodity analyst at MF Global Holdings, in the report. Industrial metals are “also teeing off somewhat disproportionately” on Chinese manufacturing, he said. [China ETFs Rise]
The iPath Copper ETN (NYSEArca: JJC) was up over 6% at last check Monday. The exchange traded fund is a debt instrument designed to track copper futures.
Copper is the third most widely used metal in the world, with the two largest mining pits found in the U.S. and Chile. Economists claim the reserves could be exhausted in about 50 years, creating the case for an investment in copper.
“At prices much below $3 a pound and oil above $80 [a barrel]it is not clear that meaningful additional supplies can be brought to the market barring a technical miracle,” Stephen Leeb, a New York money manager, said in a Barron’s report. “A resumption of even modest worldwide growth without major technological innovations will imply copper prices dramatically higher than fairly recent all-time highs.”