Friday, January 27, 2012

Copper Hits Four Month High

Copper prices have risen 16% in January, reaching a four-month high this week as signs of an improving economic outlook in China and the US boosted demand prospects. The Federal Reserve's pledge to hold interest rates near zero have encouraged higher prices for the metal.

The current contract (Mar-12) settled at $3.94/lb on Thursday, the highest Comex close since September 2011. Prices pulled back slightly on Friday as investors cashed in profits.

The decline in copper prices in late 2011 had spurred buying by consumers looking to lock in supply at a bargain price.

Physical demand for copper have forced prices higher as Chinese copper imports reached a record high in December. Bullish speculators have been snapping up Comex contracts as the weaker dollar boosts dollar-denominated copper by making the futures appear cheaper for buyers using other currencies.