Jan. 28 （Bloomberg） -- Copper may extend gains on speculation that the U.S. jobless rate report will support the Federal Reserve’s plan to keep interest rates low, buoying metals demand as the market heads for shortage, a survey showed.
Ten of 15 analysts, investors and traders surveyed by Bloomberg, or 67 percent, said the metal will rise next week. Three predicted lower prices and two people were neutral. Copper for delivery in three months was up 0.5 percent this week at $9,489.25 a metric ton as of 5:27 p.m. yesterday on the London Metal Exchange.
Figures due Feb. 4 will show that the U.S. unemployment rate this month climbed to 9.5 percent from 9.4 percent, according to the median estimate of economists surveyed by Bloomberg News. The Fed this week maintained a pledge to hold lending costs “exceptionally low” for an “extended period.”
Copper “retains a strong fundamental supply/demand equation,” said William O’Neill, a partner at Logic Advisors in Upper Saddle River, New Jersey. “The market is heading for a 500,000 ton or more production deficit in 2011.”
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 chart goes to Jan. 21.
The weekly copper survey has forecast prices accurately in 57 of the past 122 weeks, or 47 percent of the time.
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