Tension Between US and Syria, Stimulus Program Uncertainty Impact Copper

Despite signs of economic improvement from China buoying red metal prices, it was not enough to keep copper from stumbling on August 27. The red metal fell $43.89 on the LME to $7,316 a tonne due to lingering uncertainties over the Federal Reserve’s stimulus program and growing tension between the U.S. and Syria, Reuters reported.

“Copper is correlated with emerging market equities, (where) there are fears that as the Fed gets closer to tapering off quantitative easing, markets with the weakest fundamentals will see outflows of hot money,” Gianclaudio Torlizzi of metals consultancy T-Commodity told Reuters. “[However,] copper has found strong support thanks to China’s stabilisation. The (emerging market) selloff has been excessive. I would take today’s weakness as a buying opportunity.”

Copper in New York reached $3.34 a pound, an increase of $0.02, according to The Wall Street Journal.