Housing market hits copper

摘要

Copper is a barometer of the world economy, and tellingly it has fallen to $3.41 per lb. in mid-August from $4.05 in July. "As we see copper prices fall, we consider that there will a global slowdown economically," says Mike Gehrman, senior commodity specialist for PFG Best. "We have just taken out some important support areas that go all the way back to the first quarter of the year," and he says copper could decline to $3.20 before recovering to between $3.40 and $3.60. As much as 46% of copper is used in building construction, and with the U.S. housing market projected to continue its decline through 2009, he doesn't expect a turnaround soon. The trend for both production and consumption is down, notes Sholom Sanik of Friedberg Mercantile Group Ltd.