Copper prices are the one commodity (apart from gold, which is more 'financial') that investors should be watching closely during this time of volatility and interest rate-driven nervousness.
They fell sharply on Friday and then recovered some of those losses overnight.
Copper is a proxy, or should be regarded as such, for the Australia-China resources boom.
Because of its size and liquidity, it is also a good market for financial speculators like hedge funds, to operate in.
Copper is also another way of representing the boom here (seeing iron ore is not traded on world commodity markets) in the prices of BHP, Rio Tinto, and others in the metals mining business: the metal's influence extends to nickel, lead, zinc and a host of minor metals.
BHP, Rio and other miners endured a bout of weakness earlier this year when prices fell and then recovered as copper surged on the back of strong Chinese buying.
Now there's doubt on whether China will continue buying at the level it did in January through April.
With interest rates now the focus for many in the markets, that is bad news for the financial speculators who hopped into the market.
Rising interest rates makes it more expensive to maintain big speculative positions. They also raise doubts about the impact on the struggling US housing market, which is a major consumer of the metal.
So it's a case of 'when in doubt, get out'.
Gold rose $US8.70 to $US659 an ounce in New York overnight, while silver also bounced. Both reversing Friday's big losses.
Traders took some heart from the recovery in equities but that faded in late trading, amid worries about a rise in oil prices and the impact on inflation. Oil rose $US1.87 to settle at $US65.97 a barrel in New York.July silver rose 23.5 cents to $US13.275 an ounce. The metal fell 3.3 per cent on Friday and5.1 per cent last week. Gold fell 3.9 per cent last week.Crude oil rose after Saudi Arabia, the world's biggest exporter, told Asian customers that it would curtail shipments for a ninth month in July.
And Comex July copper rose 10.45 US cents in New York, or 3.2 per cent, to $US3.362/lb after falling 4.3 per cent last week.Copper prices are up 16 per cent so far this year but that's around half the level of the advance up to early May when the current jitters emerged.
Now interest rates are rising, there's more concern.
July Comex copper fell almost 12 USc Friday to $US3.2575/lb.LME copper for three months delivery tumbled $US290, or almost four per cent, to $US7,140 a tone or $US3.24 a pound.
Overnight, LME copper for delivery in three months rose $US220, or 3.1 per cent, to $US7,360 a metric ton or $US3.34/lb.
So, volatile price moves in equities and commodities.
That's something that will be watched more closely as we move into the northern summer and prices become more volatile because of a seasonal fall in demand and supplies.
