Copper May Rise as Commodities Draw More Money, Survey Shows
2010-7-30Copper, up 11 percent this month in London, may rise next week as investors allot more money to commodities, according to a survey.
Eleven of 21 analysts, investors and traders surveyed by Bloomberg, or 52 percent, said the metal will gain next week. Eight predicted lower prices and two forecast little change. Copper for delivery in three months was up 3.2 percent for this week at $7,255 a metric ton on the London Metal Exchange at 3:45 p.m. yesterday.
Hedge funds and other large speculators boosted their net- long position, or bets on higher prices, for New York copper futures to 3,915 contracts as of July 20 from 2,862 contracts on June 29, according to U.S. Commodity Futures Trading Commission data. Investors put $15.4 billion of new money into raw materials in the second quarter, up from the prior three months, Barclays Capital said July 16.
“We would not be surprised to see fresh money hitting commodities as we head into August, given the rally seen so far in July,” Randy North, a trader at RBC Capital Markets in London, wrote in a report yesterday. “This buying, in turn, will likely trigger further technically driven buying.”
The red bars on the attached chart are derived by subtracting bearish forecasts from bullish estimates, with readings below zero signaling the majority of respondents expect a decline. The green line shows the copper price. The survey data shown are as of July 23.
The weekly copper survey has forecast prices accurately in 47 of the past 97 weeks, or 48 percent of the time.
