Copper prices edged lower this week as worries over a possible recession in the west persisted after a streak of economic data pointed to a slowdown in economic growth, along with warnings from Goldman Sachs and Standard & Poor’s that the eurozone could slip back into recession before the end of the year.
 
Further denting the price of the red metal was a statement from Bank of America Merrill Lynch saying it expects copper prices to fall further in the coming months and said an upward pressure on price will not emerge until 2012. Codelco, the world’s largest copper producer also painted a cautious outlook for the red metal in 2012, suggesting that current prices are near the bottom of their cycle and will likely see a lot of volatility in the short term. The firm also said that the price of copper at the moment is not being influenced by supply and demand in copper, but is more related to the economic crisis in Europe as investors look to it as a leading indicator for the global economy.
 
In a separate report, Freeport McMoRan Copper & Gold, the world's largest publicly traded copper miner, also said there has been some softening in copper demand which could likely persist if Europe’s debt crisis deteriorates. However, bringing some comfort to investors this morning, which saw copper rebound almost 4%, was fresh hope that Europe is undertaking concrete steps to help its financial sector by recapitalising banks to protect them in the event of a Greek default. This morning copper reached a high of $3.2525 per pound, but still remained in close proximity to its 52-week low of $2.9940 per pound.