Copper Fundamental Analysis – week of August 29, 2016 – Forecast

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Published: Aug 27, 2016, 05:32 UTC

Copper ended the week near the bottom of its range weighed down by lower demand, higher inventories and the strong US dollar. The metal is trading at

Copper Fundamental Analysis – week of August 29, 2016 – Forecast

Copper ended the week near the bottom of its range weighed down by lower demand, higher inventories and the strong US dollar. The metal is trading at 2.079 down by 4% for the week and remains a sell into the new week. Zinc rallied to a 15-month high in London on signs of an emerging shortage that’s made the metal the best-performing commodity this year. Prices in Shanghai surged to the highest since 2011. Zinc has outperformed all other members on the Bloomberg Commodity Index in 2016 amid speculation that dwindling mine production and buoyant demand will leave a shortfall of the metal, used to rustproof steel.

Copper this week erased their 2016 gain—and are now down nearly 3% in the year to date—while other industrial metals have seen a surge in prices. On the CME, zinc futures have gained about 44%, iron-ore futures jumped 53% and silver has rallied by 34% since the end of 2015, while lead futures are up 8% and aluminum has gained 3%. Copper had dipped into negative year-to-date territory in July as well.

The Fed raised interest rates last December for the first time in nearly a decade. At the beginning of the year, the Fed projected it would raise rates four times this year.

But falling oil prices, China’s slowdown, rocky stock markets and the United Kingdom’s vote to leave the European Union — Brexit — forced the Fed to revise its plans, not to mention warning signs like the May jobs report.

Currently, the Fed projects it will raise rates twice this year, though Fed officials have only been talking about one increase in recent weeks. Some say Yellen gave enough hints about a rate hike without showing all her cards on Friday.

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Week beginning August 29, 2016

Date	Country	Name	Volatility	Previous	Consensus
8/31/2016	EUR	Unemployment Rate	3	6.1	6.1
8/31/2016	EUR	Unemployment Change	3	-7	-4
8/31/2016	EUR	Consumer Price Index – Core	3	0.9
8/31/2016	EUR	Consumer Price Index (YoY)	3	0.2	0.3
9/1/2016	USD	ISM Manufacturing PMI	3	52.6	52.4
9/1/2016	USD	ISM Prices Paid	3	55
9/2/2016	USD	Unemployment Rate	3	4.9	4.8
9/2/2016	USD	Nonfarm Payrolls	3	255	164