Copper trades higher amid bargain hunting
Copper prices closed the week on a bullish platform as investors exploited the recent downturn as a buying opportunity for the red metal, while a weakened dollar and a rise in U.S jobs data further strengthened the red metal.
Three-month copper on the London Metal Exchange (LME) climbed 0.6 per cent to $9,381 a tonne while Comex copper gained 1.1 per cent to stand at $4.28 per lb.
Nitesh Shah, commodity strategist at WisdomTree Investment, a New York based exchange-traded funds manager, observed that there has been a cooling down in recent weeks, which he described as a “bit overdone”. This, according to him, is potentially a good bargain-hunting opportunity for the red metal.
“We’re in the midst of an economic recovery that’s largely fuelled by huge monetary growth and strong fiscal stimulus, which is infrastructure focused and metals intensive which is equally a positive sentiment for copper,” he noted.
Helping support prices for the red metal was a reversal in the dollar , which earlier hit a three-month high against other major currencies, but later edged lower, making metals priced in the U.S. unit cheaper for holders of other currencies.
On the other hand, data from satellite surveillance of copper plants, global copper smelting activities dropped in June as Chinese plants closed for maintenance, having recorded a rebound the previous month.