Copper prices: The top 10 most important drivers

This is the third in a series of articles looking at the top 10 most important drivers behind some of the main commodity futures prices. Episode 3 looks at copper.

1) US dollar

Like most internationally traded commodities copper is priced in US dollars. At its most basic a decrease in the value of the US dollar relative to a commodity buyer’s currency means that the purchaser will need to spend less of their own currency to buy a given amount of the commodity. As the commodity becomes less expensive demand for the commodity rises, resulting in an increase in the price and vice versa.

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The best commodity market quotes

Sometimes just a few sentences can capture the essence of an argument better than anything. Here are my top 10 quotes from the world of commodities and commodity trading. For the other 40 you’ll have to read my book “Commodities: 50 Things You Really Need To Know

 1) “Stock prices can go to zero. Commodities cannot. Unlike shares in a company commodities are real things that are always likely to be worth something to somebody.”

Jim Rogers

2) “As a trader you often walk on the blade. Be careful and don’t step off.”

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A book about commodities…what more could you want?

This week marks the end of a two year project to write and publish my first book. The book “Commodities: 50 Things You Really Need To Know” is an exploration of how commodities and commodity markets influence every aspect of our lives. The idea was born out of a sense that commodity markets were, and still are widely misunderstood.

The bull market in commodity prices in the early part of the 21st century led many to believe that they were a one way bet, that prices would always go up as resources ran out and other countries sought to protect their citizens by withholding commodity supplies. As with most things in life it helps to take a step back, take a longer term perspective, and in particular to understand the role of incentives.

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