Comex copper price extends downturn to fresh low

The Comex copper price initially started in positive territory before retreating to a one-month low on Monday October 17 after the dollar surged and investors await more Chinese data.

Copper for December settlement on the Comex division of the New York Mercantile Exchange fell 0.35 cents or 0.2% to settle at $2.1070 per pound. Earlier, the contract touched $2.100, the weakest mark since September 13.

Following poor import and export figures, the People’s Bank of China (PBoC) has responded by weakening the yuan. Overnight, the central bank set the yuan parity rate at 6.7379 against the dollar, the weakest point in six years.

Chinese leadership is attempting to maintain growth between 6.5-7% and reducing the value of of their currency is one method to maintain economy stability.

Wednesday’s run of economic data from China will be of particular interest to the base metals after last week’s forecast-missing trade data. Most notably, China will publish its third-quarter GDP growth figure, which is forecast at 6.7%.

Until then, markets could drift within the established range with little in the way of fresh news to drive price direction.

“We do not have a particular view on base metals at this stage and suspect that the complex will likely grind on in relatively sideways fashion for a little while longer,” INTL FCStone analyst Edward Meir said.

In data, US Empire State manufacturing index at -6.8 undershot forecasts. Capacity Utilization rate for September disappointed at 75.4%, below the estimate of 75.6%

Lastly, U.S. industrial production month-over-month in September ticked up 0.1%, missing the economic consensus of 0.3% gain.

In other commodities, light sweet crude (WTI) oil futures on the Nymex reversed down 54 cents or 1.1% to $50.21 per barrel, while Comex gold for December settlement was last trading at $1,257.40 per oz., up $1.90.

(Editing by Tom Jennemann)

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