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How to trade copper as commodities gain but oil weakens
Industrial metals and grains are leading commodity gains during a relatively quiet performance week ahead of the US job report. Strong gains in aluminium and nickel were notable but perhaps Copper is the headline, climbing higher on speculation that China may introduce additional stimulus amid signs that demand is picking up. After reaching a three and half year low, copper has found some support back above $3 per pound and a move back above $3.10 could signal renewed investor confidence and a reduction of the speculative short, which as of March 25 was near the highest level since last July
Two government reports lent support to soybeans, with strong export demand and price pressure for corn from reduced acreage allocation this spring.
Gold and silver were range-bound with gold currently stuck between the 100 and 200 day moving averages at 1272 and 1298 respectively. The US jobs report on Friday could set the direction for next week.
Oil markets were softer, primarily on news that Libyan rebels agreed to open key export terminals in Eastern Libya. The market seems reluctant to raise hopes too much with the situation in Libya still volatile, so for now the market has adopted a wait and see approach.
Brent Crude broke the uptrend from 2009 but found support ahead of the November low at $103 with the attention turning to the US job market. If Libyan exports are finally begin to pick up it would leave Brent Crude vulnerable to further losses not least considering the continued reduction in imports from the US which dropped to the lowest since 1996.
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