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  • Feb 4th, 2005
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Copper futures tumbled to a one-month low in New York on Thursday as die-hard bulls capitulated after a Federal Reserve interest rate increase pushed up the dollar, and with it the cost of copper. Speculators sold on disappointment that copper's rally last month fell just short of October's multiyear high.

The liquidation of long positions accelerated as benchmark March futures on the COMEX division of the New York Mercantile Exchange fell to their lowest price since January 5, after closing below $1.40 a lb. the previous session.

March copper was down 2.55 cents, or 1.8 percent, at $1.3680 a lb. The range was $1.3970 to $1.3560, extending a 2.25 cent rout on Wednesday,

Pre-placed sell orders below $1.39 and $1.38 were executed as traders rushed for the exits. Estimated copper volume at 10 am was heavy at 9,000 contracts.

Spot February was 2.55 cents lower at $1.4080 a lb.

The Federal Reserve concluded a two-day policy meeting Wednesday, after copper trading closed, by raising the federal funds target rate for overnight lending between banks a quarter percentage point to 2.50 percent. Asian copper prices fell on expectations of higher copper stocks and weaker demand in China, which buys about one-fifth of the world's copper.

LME copper warehouse stocks rose 1,550 tonnes to 49,575 tonnes on Thursday. COMEX stocks were unchanged at 45,817 short tons on Wednesday.

Copyright Reuters, 2005


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