Copper prices rise on scrapping of Greek referendum, U.S. jobs revision
Copper futures spiked following a heavily revised U.S. jobs report and a scrapping of the EU referendum for Greece, as the two developments pushed the metal higher, Dow Jones Newswires reported.
The most actively traded contract for the metal, for December delivery, rose $0.60 to $3.59 a pound, marking an increase of 0.2 for the commodity, according to the news outlet.
This combination of factors from both sides of the Atlantic could push the metal higher, positive news for companies that hold significant deposits of the commodity in resource-rich areas like Northwestern Mexico. Copper mining stocks could increase in value by a sharp margin over the next several weeks.
Although the numbers for jobs added in the U.S. during October fell short of the initial forecasts, August and September data were adjusted upward. This is good news for copper, as the value of the metal increases if companies have more expendable income for things that require the commodity like laptops, refrigerators and cars, Dow Jones reported.
Reuters noted that the U.S. jobs data was not the only factor that helped the metal move up, as the Greeks voted to drop plans to hold a referendum on a European Union bailout.
According to the news source, Greek Prime Minister George Papandreou faced a cliff-hanger vote of confidence following a backtrack by the leader on his "shock-call" for a referendum on the bailout funds.
"The market is purely sentiment-driven at the moment; risk sentiment keeps swinging back and forward but volumes are pretty low," Andrey Kryuchenkov, an analyst for VTB Capital, told Reuters. "People are hoping that...Greece will do whatever the EU proposes and that the debt crisis won't spread."
The metal was also affected by the role that the European Central Bank has played in the ongoing debt crisis, as the institution's decision to cut interest rates supported the sentiment in the commodity markets.
"The surprise rate cut by the ECB on Thursday is a two-edged sword for industrial metals," analysts from Credit Suisse told the news source. "On the one hand, lower rates mean lower financing costs for industrial metals. On the other hand, it also signals that the economic slowdown is probably not over yet."