Weak Chinese data pressures Comex copper price to fresh low

Copper prices in the U.S sold off on Thursday, October 13, after disappointing Chinese data raised global demand concerns.

Copper for December settlement on the Comex division of the New York Mercantile Exchange closed Thursday down 5.45 cents or 2.5% to $2.1220 per pound. Earlier, the contract slid to $2.1165 per pound, the lowest since September 13.

Comex gold for December delivery rose $4.60 or 0.4% to $1,258.40 per oz – the highest point since last Friday. Trade has been narrow between $1,254.70 and $1,263.90.

This morning, the red metal began the session in negative territory, but saw continued selling pressure as US traders from coast-to-coast came online and saw that overnight Chinese trade data had slowed down as the second half of the year progresses. China’s overall exports dropped 10% and imports slipped 1.9% in September, both on a year-on-year basis in dollar-denominated terms.

In copper specific data, China’s imports of unwrought copper and copper products fell 2.9% month-on-month and 26.1% year-on-year to 340,000 tonnes in September – this was also the sixth consecutive month-on-month decline.

“Disappointing Chinese trade data released overnight set the tone for the day leading to weakness in equities and a slight pull back in oil prices,” Sucden Financial said. “Base metals, which had been under some pressure yesterday, fell further with recent technical support areas breached on copper, lead and zinc in good volume turnover.”

Here in the US, the release of the Federal Open Market Committee (FOMC) September meeting minutes showed that the central bank’s policy board is growing more hawkish.

Doves argued that weak foreign economic growth and inflation remaining persistently below 2% are the main reasons for keeping interest rates accommodative, while hawkish members cited a robust labour market and diminished global risks as grounds to raise rates.

With a presidential elections coming days after the FOMC’s November meeting, December is now seen as the last realistic chance for the Fed to resume the normalisation of interest rates.

“With the US election less than a month away and a US rate rise also likely in the fourth quarter, the market has a lot to think about,” William Adams, Metal Bulletin analyst, said. “We feel investors will continue to want safe-haven cover in the months ahead so we expect this dip to be short-lived.”

In US data, unemployment claims between September 29 through October 6 came in at 246,000, below the 252,000 forecast. Import prices month-over-month in September was in-line with expectations at a 0.1 percent gain.

Meanwhile in US markets, the Dow Jones industrial average and S&P were both down 0.5%, while the dollar softened 0.4 percent to $1.1046 against the euro.

In other commodities, light sweet crude (WTI) oil futures on the Nymex ticked up 14 cents or 0.3% to $50.78 per barrel, while the most active Comex silver contract was last trading at $17.465 per oz., down four cents.

(Editing by Tom Jennemann)

The post Weak Chinese data pressures Comex copper price to fresh low appeared first on The Bullion Desk.

from The Bullion Desk http://ift.tt/2dzkFXl
via IFTTT