Copper prices decline on end to strike action

Friday, November 28, 2014

Three month LME copper prices exhibited further declines today, as prices sold off by as much as 3%, closing lower for the fifth straight session and capping a week where prices declined by over 5%. Copper prices extended losses to an eight month low today, trading towards $6,350/tonne for the first time since March, as strike action at the Antamina copper mine in Peru came to an end. The mine, which produced one third of Peru’s total production in 2013, is expected to return to normal operations this week after a three week strike. However, a significant influx of material is not expected, as output for the first nine months of the year is still down 16% year-on-year at 273,411 tonnes. With additional weakness also seen in aluminium prices the base metals complex may experience further downward pressure in the coming sessions, following the slide in crude oil prices.     

Markets were still reeling from OPEC’s decision to keep their production quota unchanged at 30m bpd yesterday, with the majority of commodity prices moving lower on the prospects for further price deflation. Spot gold prices fell for a third straight session today as the yellow metal headed for its first weekly decline in a month, trading below $1,180/oz at one stage. Prices have lost a modest 1.5% year-to-date after last year’s substantial 28% decline and with the recent move attempting a breakout on the upside above $1,200/oz, unable to gain enough momentum, we could see an extension of selling pressure back down to $1,150/oz with the potential for protracted losses to target the year-to-date low at $1,132/oz.

Platinum prices also came up against firm selling pressure yesterday as prices struggled to build on recent gains with resistance, holding firm towards $1,230/oz. Trading activity throughout today’s trading session has seen spot prices extend losses back towards $1,208/oz early on before recovering most of the day’s losses towards $1,215/oz. Total holding for all known platinum ETF holdings fell 1.2% on Wednesday, with data unavailable for yesterday due to the US holiday. Weak investor sentiment could see prices experience further weakness over the coming session while a strong dollar could limit any upside potential further.

3-M copper prices drop to an eight month low

LMCADS03 Comdty LME COPPER 3 2014 11 28 15 35 17

Gold extends declines on deflation expectations

XAU Curncy Gold Spot Oz 2014 11 28 15 35 32

Platinum ETF holdings drop on sluggish investment demand

ETFPPLTO Index Platinum Holding 2014 11 28 12 45 15

Topics: Copper, Gold, LME, Platinum
More from: Kash Kamal