Comex copper resumes downturn, investors await US jobs data

Comex copper prices consolidated Thursday, December 1 despite data showing that the US and China are growing at a multi-year high pace in manufacturing and jobs creation. 

Copper for March delivery on the Comex division of the New York Mercantile Exchange declined 0.65 cents or 0.3% to $2.6265 per pound. Trade has ranged from $2.6130 to $2.6685.

Comex gold for December settlement fell $2.0 or 0.2% to $1,171.90 per oz. Trade has been narrow between $1,163.80 to $1,178.40.

Overnight, China’s official manufacturing PMI of 51.7 for November was the highest reading in two years. The figure was better than the forecast of 51 and October’s reading of 51.2.

The Caixin manufacturing PMI for November at 50.9 was in line with expectations but lower than October’s reading of 51.2. Throughout the year, the People’s Bank of China (PBoC) has injected billions of yuan into the economy to stabilize growth and and ensure the country expands at a clip of 6.5-7%.

“The Purchasing Managers’ Index points to rising inflation expectations, which suggests an upward trend in market interest rates.,” Commerzbank said. “This reduces the scope for further monetary policy easing on the part of the Chinese central bank.”

Investors are now awaiting tomorrow’s US employment report, which is the final major data announcement before the Federal Reserve convenes and decides whether to raise rates or not. Prediction markets are essentially pricing-in a 100% chance that chairwoman Janet Yellen and colleagues raise rates for the first time in a calendar year.

Yesterday’s ADP non-farm employment change – a precursor to Friday’s blockbuster US jobs report – surprised on the upside at 216,000. A reading of 161,000 had been expected.

“Overall sentiment in the market is buoyant and supportive of risky assets,” Metal Bulletin analyst Andy Farida said. “In light of this, the precious metals are likely to remain under selling pressure while funds continue to rotate out of safe-haven assets.”

Turning to European markets, Germany’s DAX and France’s CAC-40 were down 0.9% and 0.6% respectively, while the dollar softened by 0.4% to 1.0624 against the euro.

In other commodities, light sweet crude (WTI) oil futures on the Nymex continued to rise 98 cents or 2% to $50.42 per barrel, while Comex silver for December settlement was recently trading at $16.510 per oz., up $2.8 cents.

(Editing by Tom Jennemann)

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