Copper's Rally Short-Lived
Source: Copper Investing News, Leia Michele Toovey (9/14/10)
"Inventories gained for the first time in eight sessions."
Monday's upside was owed to a report on China's growth, showing that industrial production rose 13.9% year on year, rebounding after slowing to 13.4% in July. In addition, the U.S. dollar witnessed its biggest one-day fall against the euro in two months, encouraging money flows into riskier currencies.
On Tuesday, the metal reversed, falling as confidence in the German economy slumped and investors were cautions over the possibility that China may take steps to curb real-estate investment. Copper futures for delivery in December fell 1.1% to $3.44/lb. on the Comex.
Germany's ZEW Center for European Economic Research said its index of investor and analyst confidence, which aims to predict developments six months ahead, dropped to -4.3 from 14 in August. The figures "pointed to deterioration in the currently strong conditions," said Citigroup Analyst David Thurtell. On the LME, copper for delivery in three months dropped 0.8% to $7,570/ton. Inventories tracked by the LME gained for the first time in eight sessions.