WSJ: BASE METALS: Comex Copper Hits 14-Month High As Dollar Falls
By Allen Sykora
Of DOW JONES NEWSWIRES
Copper futures have hit their highest level in roughly 14 months Wednesday in reaction to renewed weakness in the U.S. dollar and general buying of hard assets.
Around 8:55 a.m. EST (1355 GMT), December copper was up 3.50 cents to $3.1435 per pound on the Comex division of the New York Mercantile Exchange.
One trader tied the gains to a "reflation trade" that is also supporting other commodities such as gold and silver, the S&P futures and the euro against the dollar.
"They're all going up together," he said.
Three-months copper in London hit a fresh high for the year of $6,992 a metric ton, and the Comex futures followed.
"In today's trading, the metal-dollar relationship has reverted back to its more traditional role, as further weakness in the greenback has resulted in another sprint higher in metals," said MF Global analyst Edward Meir.
The euro rose to $1.4942 from $1.4869 late Tuesday afternoon. The December dollar index was down 0.335 point to 75.130.
Comex December copper got as high as $3.1720 overnight, its strongest level since September 2008.
The trader pointed out that copper is rising despite increasing inventories and some doubts about the strength of demand.
"Other people are saying next year, it will be better, and that might be true," the trader said. "But I don't think the fundamentals have much to do with the copper market these days."
Instead, the metal is rising as investment-type money keeps flowing into baskets of commodities.
"Look at gold. It's outpacing the stock market," he said.
London Metal Exchange copper warehouse stocks rose 4,100 metric tons to 414,100, which Meir noted is the highest level since April.
Copper opened the pit session higher, then pared gains slightly following early-morning U.S. economic data.
The October Consumer Price Index rose 0.3%, compared to an expectation for a 0.2% rise. Core CPI excluding food and energy was up 0.2% after a forecast of 0.1%.
October housing starts fell 10.6% to a seasonally adjusted annual rate of 529,000, when the market had been looking for increase to 600,000.
-By Allen Sykora, Dow Jones Newswires; 541-318-8765; allen.sykora@dowjones.com
