After a sharp upward price move during overnight trading, copper has fallen back rather significantly from its initial highs. Many traders feel that copper hasn't performed nearly as impressively as gold during the last 24 hours, as improving US and global economic conditions and mostly favorable outside market action hasn't provided copper prices with a large amount of support.
A surprisingly large rise in LME copper stocks overnight of 13,725 tons may have dampened market sentiment, and the overall macro economic outlook may not have become conclusively upbeat just yet. Some traders feel that copper might need to see signs of better economic activity in a key demand sector like China to find additional support this morning. However, US housing starts today are expected to be slightly improved and that comes on the heels of another rise in a key private survey of US house prices that may encourage more talk that the US housing sector is turning the corner.
Copper might also be finding pressure from news overnight of an increase in copper production from Xstrata in third quarter earnings, and it is also possible that copper is seeing some minor pressure from reports that another Chilean miner was planning to increase their copper output over the long run.
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