Copper dips slightly ahead of Fed, China easing hopes support

Investing.com - Copper prices fell for the first time in three sessions on Tuesday, as investors awaited hints on monetary policy from the Federal Reserve.

Futures remained supported amid speculation policymakers in China will have to introduce further stimulus measures to jumpstart the economy amid lackluster growth.

On the Comex division of the New York Mercantile Exchange, copper for July delivery shed 0.4 cents, or 0.14%, to trade at $2.773 a pound during European morning hours.

Futures were likely to find support at $2.694, the low from April 24, and resistance at $2.829, the high from April 20.

Market participants were looking ahead to the conclusion of the Federal Reserve's two-day monetary policy meeting on Wednesday, which could provide indications over the timing of a future rate hike.

A recent run of disappointing U.S. economic data dampened optimism over the recovery, fuelling speculation the Fed could delay hiking interest rates until late 2015, instead of tightening midyear.

The dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was down 0.1% to trade at 96.80 early on Tuesday.

A day earlier, copper hit $2.790, the strongest level since April 20, before ending at $2.777, up 2.4 cents, or 0.87%, on hopes of more monetary stimulus from China.

Since November, the People's Bank of China has introduced a series of stimulus measures, including lowering interest rates twice and cutting the reserve requirement ratios of major banks twice, in order to spur economic activity and boost growth.

The Asian nation is the world’s largest copper consumer, accounting for almost 40% of world consumption.

Elsewhere, gold futures for June delivery slipped $2.30, or 0.19%, to trade at $1,200.90 a troy ounce, while silver futures for July delivery slumped 5.4 cents, or 0.33% to trade at $16.38 an ounce.

Meanwhile, hopes for a breakthrough on Greece’s debt negotiations were boosted after Greek Prime Minister Alexis Tsipras reshuffled the team handling talks with the country’s international lenders, fuelling optimism that a deal will be reached by early May.

Athens must pay €780 million due to the International Monetary Fund on May 12, fuelling fears that the country could default on its debt be forced out of the euro zone.