Copper ETFs Lower on Goldman Remarks

Includes: COPX, CU, JJCTF
by: Tom Lydon

ETFs for copper have moved lower this week and came under additional selling pressure Wednesday after Goldman Sachs (NYSE:GS) said it’s closing a recommended trade based on the industrial metal.

The iPath Dow Jones-UBS Copper Total Return Subindex ETN (JJC) was down over 1% in morning trade Wednesday.

Goldman strategists made waves earlier this week when they recommended pulling out of a commodities trade suggested in December 2010. On Tuesday, Goldman analysts said the oil market is due for a “substantial pullback,” which contributed to the weakness in crude ETFs.

Now, the influential Wall Street firm has downgraded its outlook for copper, according to reports. “We now believe that prices will likely remain rangebound in 2011 and that risk has become more symmetric given our view that inventories are unlikely to draw down to critically low levels before 2012,” Goldman said, according to Barron’s.

Investors pay close attention to copper prices because they are seen as an indicator for the health of the global economy.

ETFs tracking copper futures and copper miners have traded in a range so far this year. Options include iPath Dow Jones-UBS Copper, First Trust ISE Global Copper Index Fund (NASDAQ:CU) and Global X Copper Miners ETF (NYSEARCA:COPX).

First Trust ISE Global Copper

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