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Copper futures edge lower after China inflation data

Published 10/15/2014, 03:51 AM
Updated 10/15/2014, 03:51 AM
Copper pulls back from 4-week high after China inflation data

Investing.com - Copper futures were mildly lower during European morning trade on Wednesday, after data showed that Chinese inflation in September slowed more than expected, underlining concerns over the health of the world's second biggest economy.

On the Comex division of the New York Mercantile Exchange, copper for December delivery traded at $3.074 a pound during European morning hours, down 1.6 cents, or 0.52%.

A day earlier, Comex copper prices hit a daily high of $3.104, a level not seen since September 19, before settling at $3.090 a pound, up 4.9 cents, or 1.63%.

Futures were likely to find support at $3.032, the low from October 14, and resistance at $3.104, the high from October 14.

Official data released earlier showed that Chinese inflation for September slowed to 1.6% on-year from 2.0% in August, below expectations for a reading of 1.7%.

The weaker than expected data underlined concerns about China's economy and sparked speculation policymakers in Beijing will have to introduce fresh stimulus to meet the government's 7.5% growth target.

China is the world's largest copper consumer, accounting for nearly 40% of global demand.

Meanwhile, market players looked ahead to the release of key U.S. data later in the session for further indications on the strength of the economy and the future path of monetary policy.

The Commerce Department is expected to report that retail sales fell by 0.1% in September, after rising 0.6% in August.

The U.S. is also to release data on producer prices and manufacturing activity in the New York region.

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Elsewhere on the Comex, gold for December delivery shed $9.40, or 0.76%, to trade at $1,224.90 a troy ounce, while silver for December delivery tumbled 29.1 cents, or 1.67% to trade at $17.09 an ounce.

Gold prices rallied to a four-week high of $1,238.50 on Tuesday amid speculation weaker than expected global economic growth and its effect on the U.S. economy may lead the Federal Reserve to push back interest-rate increases.

A delay in raising interest rates would be seen as bullish for gold, as it decreases the relative cost of holding on to the metal, which doesn't offer investors any similar guaranteed payout.

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