An exchange traded note tracking copper futures is on a six-day losing streak, falling nearly 8% and signaling investor concerns about global growth.
Copper prices rebounded about 1% Thursday morning on hopes the European Central Bank will buy more bonds to ease the debt crisis.
Investors keep an eye on copper as an indicator for the health of the global economy, particularly China. [What Materials, Copper ETFs are Saying About the Market]
“Risk appetite has come back: comments from the ECB executive signaled that the bank could intervene with further release of credit; Chinese new loans data was significantly better than expected and car sales data showed an improvement,” said Eugen Weinberg, head of commodity research at Commerzbank, in a Reuters story Thursday.
Copper ETFs have had a decent track record lately in terms of sending timely warnings about looming trouble in U.S. stocks. [Dr. Copper: Using ETFs to Diagnose the Global Economy’s Health]
However, the most accurate forecasters are predicting copper shortages and an improving U.S. economy will push prices to the highest in a year in the next quarter, according to a separate report.