Is Dr. Copper already telling us that the upcoming EU summit is a bust?
The industrial metal was down sharply in mid-day trading Thursday, as investors worried about reports that the EU was split over how to strengthen the euro zone's bailout fund. The high-profile EU summit is set to begin Sunday.
As goes copper , so goes the market, MF Global’s Rich Ilczysyn said. And he thinks the downward slide may just be beginning.
“Copper’s got a line in the sand that all traders are looking at—it’s $3,” he said. “A close below $3 [Thursday]… is going to be negative for everything—NASDAQ , Dow Jones, and the S&P in my opinion.”
Copper also paves the way for silver and gold , according to Ilczysyzn. So if you are trading any of these markets, he said you have to make sure to pay attention to copper.
But the Fast traders were mixed on how to play the gold trade.
Steve Cortes is short gold, and will look to sell more if it breaks $1600. He said those who think of the precious metal as an insurance policy only have to look at Thursday’s market action.
“This is a day when gold is supposed to do well, and instead its getting killed, which I think tips its hand that this is no insurance policy,” he said. “This is a speculative play that you want to be short.”