Copper prices have fallen in two of the last three sessions, and some analysts foresee the potential for more turbulence ahead for the commodity that hit three-year highs just a week ago.
Some commodity watchers caution that bets by hedge funds and other speculative investors are behind much of copper’s rally, which could lead to a sharp pullback if more traders start taking their chips off the table.
The biggest wildcard is China, where economic data has been better than expected so far this year, but some experts warn that any signs of weakness in China’s economy or any disruption from a key Communist Party leadership transition later this year could hurt copper; indeed, the recent pullback started after the release of data showed that Chinese copper imports were flat in August from the previous month.
Relevant tickers include FCX, TECK, BHP, RIO, VALE, SCCO, OTCPK:GLCNF, OTCPK:GLNCY, OTCPK:AAUKF, OTCPK:AAUKY, OTC:ANFGF, OTCPK:ANFGY
ETFs: JJC, CPER, CUPM