Copper took a big hit on Tuesday, losing 3.2 percent on the COMEX as Eurozone fears gained momentum. All of the six main metals traded on the LME fell, led by nickel. Copper for delivery in three months lost 2.5 percent to $6,735 a metric tonne on the London Metal Exchange.
Copper tracked a modest rebound on Tuesday, climbing 2.5 percent to touch $6,630.25 per tonne in early morning trading on the LME. In the two previous sessions, the metal, often looked to as the barometer of economic health, lost almost 10 percent of its value.
U.S. copper futures closed with strong gains on Monday after a $1 trillion emergency package in Europe helped restore confidence in the global recovery. Unfortunately, the relief was short lived, as the markets suffered losses upon opening on Tuesday.
Copper fell to a nine-week low in both London and New York Monday as pessimistic manufacturing data out of China reminded the globe how critical the country’s economy is to the entire base metals complex.
As news over impending fraud charges against leading commodities player Goldman Sachs hit the market last Friday, copper witnessed considerable downside. Risk averse investors jumped from their positions, sending copper plummeting to a three month low.
Surprisingly upbeat economic data out of the US boosted copper to its highest price since the Lehman bankruptcy.
Copper prices hit a 19-month peak as increased risk appetite drove investors to the red metal. The biggest fear permeating the market in recent weeks has been the potential for fall-out from an economic collapse in Greece.
In early trade Tuesday, better than expected US home data buoyed copper on the COMEX after dipping for four straight sessions. But, the ascent was just a blip with the upside being limited by a lack of positive economic indicators.
After hitting a two-week low Monday, copper climbed on Tuesday fueled by a declining greenback. The US dollar is taking a pause in anticipation of this week’s Federal Reserve meeting.
The Chilean earthquake boosted copper; as concerns over supply threats permeated the market. The 8.8 magnitude quake hit over the weekend, and when the markets opened Monday the red metal climbed the most in nearly a year.
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