Copper dips on profit taking

The price of copper is down 0.5% today as traders lock in their profits from the two-week high it reached yesterday.

The price of copper has been declining steadily over the past few months, losing over 6% in the past quarter, so dealers used yesterday’s two-week high as an excuse to secure profits. The financial markets do not move in straight lines so even though the chart indicates a downward trend, we can see some short term rallies. This could be the beginning of another downward move for copper.

Trading volumes are low today as it is a public holiday in the US, but investors are already looking ahead to tomorrow’s US unemployment update; chiefly because the Federal Reserve has promised to keep its stimulus package in place until the unemployment rates falls.

Its bond-buying scheme has put pressure on the US dollar so if there are any signs of tapering, we could see the currency strengthen, and, since all commodities could are traded in US dollars, this could hit the price of copper.

High grade copper chart

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