To fight against rising consumer prices, investors have increased their holdings in the commodities markets; hence, the Reuters/Jeffries CRB Index, which includes 19 raw materials, has witnessed a 15 percent rise since the beginning of the year. As the dollar continues to weaken and energy prices rise, copper futures fluctuate in this volatile economy. This week, it seems possible that copper futures will rise, but how long will the rise last before demand causes copper futures to spiral downwards?
On Monday, Bloomberg shared that copper rose in New York, “erasing earlier declines … Copper fluctuated between rising and falling today as traders weighed inflation concerns with an outlook for slowing global growth. Most-active futures gained as much as 0.8 percent and lost as much as 0.5 percent.”
One trader, anthropomorphizing the metal, refers to its hesitant nature in the current market. Copper, explained Frank McGhee, the head dealer at Integrated Brokerage Services LLC in Chicago, “is still trying to decide what direction it wants to take.” Copper demand has slowed during the current credit crunch and housing slump, and although Bloomberg reports copper future gains of $39, or 0.5 percent, to $7,995 a metric ton ($3.63 a pound), it seems that soon enough, hesitant copper might make a decision and hop in the waterfall instead of the wading pool, hitting lows that have been expected since the copper price reached a record $8,940 earlier this month.