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Copper prices rose Tuesday, as negotiations over a wage dispute at the world’s largest copper mine entered a critical phase that could result in a strike if an agreement isn’t reached.
The front-month contract for August delivery rose 0.7% to $2.741 a pound at the Comex division of the New York Mercantile Exchange. The more active September contract rose 0.8%.
Government-led mediation talks at Chile’s Escondida copper mine between the operator and the labor union were set to begin Tuesday.
“This is the last chance to avert a strike,” analysts at Commerzbank wrote in a note Tuesday.
At the same time, copper production at the mine fell 11% in June from a month earlier to just below 102,000 tons, according to recently released government data.
Copper prices had come under pressure at the start of the week amid an escalating trade dispute between the U.S. and China, the world’s largest consumer of industrial metals.
“Until there’s something more concrete that comes out of the U.S.-China trade talks, I don’t think you’re going to see much room in copper,” said Bob Haberkorn, a senior market strategist at RJO Futures.
Bill Baruch, president of Blue Line Futures, said some of the pressure on the copper market came as traders responded to chart patterns that suggested prices were stuck in a range. “It needs to close above $2.80 consistently to get out of this kind of rut,” he said.
Meanwhile, gold prices ticked up Tuesday, mainly as a result of a weaker U.S. dollar. Comex gold contracts for August rose 0.1% to $1,209.60 a troy ounce. The more active October contract also rose 0.1%.
Dollar-denominated commodities like gold tend to have an inverse relationship with the greenback. The WSJ Dollar Index, which measures U.S. currency against a basket of 16 of its peers, was down 0.2% on Tuesday.
Gold has overall been declining in recent weeks, as the dollar has risen in conjunction with rising U.S. interest rates. Prices recently traded at the lowest point in more than a year.
“The main trend still remains negative,” Carlo Alberto de Casa, chief analyst at ActivTrades, said of gold’s trajectory.
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