Investing.com - Copper prices fell to the lowest level in more than a week on Tuesday, as a broadly stronger U.S. dollar weighed, while steps by China to shore up its economy limited losses.
On the Comex division of the New York Mercantile Exchange, copper for May delivery hit an intraday low of $2.749 a pound, the weakest level since March 20, before trading at $2.752 during European morning hours, down 3.0 cents, or 1.08%.
A day earlier, copper tacked on 1.4 cents, or 0.51%, to settle at $2.781. Futures were likely to find support at $2.644, the low from March 20, and resistance at $2.869, the high from March 26.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was up 0.6% to 98.89 early on Tuesday. The index is on track to post a gain of 3% this month.
A stronger dollar dampens demand for raw materials as an alternative investment and makes dollar-priced commodities more expensive for holders of other currencies.
The dollar has been bolstered by the diverging outlook for monetary policy in the U.S. compared to other major economies, such as Europe and Japan.
Investors were turning their attention to Friday’s U.S. employment report for February for further indications on the future path of monetary policy.
A strong U.S. nonfarm payrolls report was likely to add to speculation over when the Federal Reserve will begin to raise interest rates, while a weak number could weigh on the dollar by undermining the argument for an early rate hike.
Meanwhile, policymakers in China introduced measures to assist the country's slowing housing sector on Monday. The government announced steps to relax housing taxes and lending rules in an effort to support sliding house prices that have threatened economic growth.
The Asian nation is the world’s largest copper consumer, accounting for almost 40% of world consumption last year.
Comex copper prices have been well-supported in recent weeks amid speculation demand for the industrial metal will increase due to accommodative central bank policies in the U.S., Europe and China.
The red metal is on track to post a gain of more than 2% in March.
Elsewhere on the Comex, gold futures for June delivery shed $5.30, or 0.45%, to trade at $1,180.00 a troy ounce, while silver futures for May delivery dropped 15.7 cents, or 0.94% to trade at $16.51 an ounce.
Gold prices are down almost 3% in March, as the dollar strengthened amid growing expectations for higher interest rates in the U.S. later this year.