After small profit-taking, investors start to make new bets to begin 2021, expecting the red metal to exceed gold this year.
March copper futures elevated $0.0495, or 1.39%, to $3.614 per pound at 16:13 GMT on Tuesday on the COMEX division of the New York Mercantile Exchange. Copper has sustained the drive from last year, surging almost 3% after longer than a week in 2021.
Copper’s meteoric rise since the height of the market meltdown approximately a year ago has profited from rising short-term fundamentals, including China’s unbelievable buying spree and institutional funds expecting a commodities-driven world economic restoration.
Notwithstanding the bullish investments, the large funds have involved in some profit-taking, somewhat cutting their long-term positions from December to January.
Citing Commodity Futures Trading Commission (CFTC) data, Reuters informed that money managers were net long on COMEX to the number of 80,768 contracts as of Jan. 5, down from 90,434 amid December but yet high by any historical standard.
Contemplative positioning in the London market has followed the same model. Investment funds cut their combined net-long from 43,835 contracts amid December to 36,669 in the first week of January.
Market watchers are worried that copper’s latest strength depends on the achievement of the wider financial market. Goldman Sachs said that the increase in equity valuations and bond markets was showing limited upside in a recent research record. Investors have shown concerns about a consolidation pullback in financial markets.
But could there be a more sweeping change in the copper market?
There have been rumblings of weaker demand in China after the world’s most far-reaching consumer purchasing record numbers last year, restocking inventory levels. Plus, many copper producers are increasing production this year, including Central Asia Metals, recognizing its excellent balance sheet and debt repayments.
Copper prices profited from a lower dollar as the US Dollar Index, which gauges the dollar versus a basket of currencies, fell 0.12% to 90.36, from an opening of 90.52. A lower dollar is excellent for dollar-pegged commodities because it makes them more affordable for foreign investors to obtain. Financial markets had been bearish on the DXY going into 2021, but the dollar has increased more than 1% over the last week.
In other metal markets, February gold futures dropped $11.00, or 0.5943%, to $1,839.80 per ounce. March silver futures got up $0.051, or 0.2%, to $25.335 per ounce. March platinum futures pinned on $20.40, or 1.95%, to $1,065.00 an ounce. March palladium futures decreased $4.30, or 0.18%, to $2,374.50 an ounce.