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Copper futures bounce off 6-week low on weaker U.S. dollar

Published 01/27/2014, 04:33 AM
Copper prices turn higher after hitting 6-week low

Investing.com - Copper futures regained strength on Monday to bounce off a six-week low, as a broadly weaker U.S. dollar boosted the appeal of the industrial metal.

On the Comex division of the New York Mercantile Exchange, copper futures for March delivery hit a session low of USD3.258 a pound, the weakest level since December 11, before turning higher to trade at USD3.280 a pound during European morning trade, up 0.25%.

The March copper contract settled 0.43% lower on Friday to end at USD3.271 a pound, as investors fled riskier assets amid growing fears over a slowdown in emerging market economies.

Copper prices were likely to find support at USD3.256 a pound, the low from December 11 and resistance at USD3.299 a pound, the high from January 24.

The selloff in financial markets was triggered after data last week pointed to a steeper than expected slowdown in Chinese manufacturing, fuelling fears that weakness could spread to other emerging market economies.

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

Investors were looking ahead to the outcome of the Federal Reserve’s monthly meeting on Wednesday, amid expectations for a reduction in its bond buying program to USD65 billion from the current USD75 billion.

The policy meeting will mark the last for outgoing Fed Chairman Ben Bernanke, as current Vice Chair Janet Yellen prepares to take over.

In addition, the initial estimate of U.S. fourth quarter gross domestic product is reported on Thursday.

Elsewhere on the Comex, gold for February delivery inched up 0.4% to trade at USD1,269.80 a troy ounce, while silver for March delivery rallied 1% to trade at USD19.96 a troy ounce.

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