IV:Copper swings between gains and losses ahead of Fed meeting
Investing.com - Copper futures fluctuated between small gains and losses on Tuesday, as traders awaited the outcome of the Federal Reserve’s policy-setting meeting on Wednesday, amid expectations for a small reduction in the bank’s stimulus program.
On the Comex division of the New York Mercantile Exchange, copper futures for December delivery traded at USD3.219 a pound during European morning trade, down 0.1%. The December contract settled 0.6% higher at USD3.222 a pound on Monday.
Copper prices traded in a range between USD3.198 a pound, the daily low and a session high of USD3.231 a pound.
Copper prices were likely to find support at USD3.191 a pound, the low from September 13 and resistance at USD3.272 a pound, the high from September 12.
Market analysts expected the Fed will start cutting monthly bond purchases by USD10 billion to USD75 billion when it concludes its two-day policy meeting on Wednesday.
Monthly purchases of Treasuries will be scaled back by USD10 billion to USD35 billion, while mortgage-bond buying will remain unchanged at USD40 billion.
Copper prices advanced on Monday as the U.S. dollar came under pressure after former U.S. Treasury Secretary Lawrence Summers bowed out of the race to succeed Ben Bernanke as the next chairman of the U.S. central bank.
Summers’ was perceived as being likely to unwind economic stimulus measures more aggressively than the other main contender for the post, current Fed Vice Chairwoman Janet Yellen.
The Fed’s stimulus program is viewed by many investors as a key driver in boosting the price of commodities as it tends to depress the value of the dollar.
Elsewhere on the Comex, gold for December delivery inched up 0.05% to trade at USD1,318.40 a troy ounce, while silver for December delivery was little changed to trade at USD22.00 a troy ounce.
