Copper goes up

Falling dollar increases the appeal of red metal

Copper prices rose higher at Comex on Thursday, 24 December 2009. Prices rose as the dollar fell following couple of economic data increasing the appeal of metals as an alternate source of investment.

At USA, copper futures for March delivery ended higher by 8.9 cents (2.8%) to 3.2925 a pound. For the week, copper ended higher by 2.3%. Copper ended November 2009 higher by 6.6%. On a year to date basis, copper has climbed 120%.

In the currency market on Thursday, the dollar index, which weighs the strength of dollar against the basket of six other currencies fell by almost 0.1%. The dollar was weak against most of its counterparts following better than expected economic data.

The Labor Department in US reported on Thursday, 24 December, 2009 that the first-time claims for state unemployment benefits fell a seasonally adjusted 28,000 to 452,000 in the week ended 19 December, 2009, hitting the lowest level since September 2008. The figure was lower than expectation.

The U.S. buys about 13% of the 17 million metric tons of copper sold annually and China buys about 20%.

In FY 2008, copper prices dropped by 54%. Prior to 2008, copper prices ended FY 2007 with a gain of mere 5.5% after a whopping 44% gain in FY 2006. The price of copper gained every year since 2002 as global economic growth boosted demand for the metal used in pipes and wires.