Investing.com - Copper futures edged lower on Monday, as traders weighed whether a surprise rate cut in China would translate into an increase in demand for the industrial metal.
On the Comex division of the New York Mercantile Exchange, copper for March delivery declined 0.4 cents, or 0.12% to trade at $3.026 a pound during European morning hours.
On Friday, copper prices tacked on 1.2 cents, or 0.4%, to settle at $3.031 a pound.
Futures were likely to find support at $3.001, the low from November 20, and resistance at $3.077, the high from November 21.
The People's Bank of China cut its benchmark one-year deposit rate by 25 basis points to 2.75% on Friday and trimmed its one-year lending rate by 40 basis points to 5.6%.
The move came in response to recent signs of a slowdown in the world’s second-largest economy.
The Asian nation is the world’s largest copper consumer, accounting for almost 40% of world consumption last year.
Comex copper prices have been under pressure in recent weeks amid mounting concerns over the health of the global economy.
Copper is sensitive to the economic growth outlook because of its widespread uses across industries.
Elsewhere on the Comex, gold futures for February delivery lost $1.50, or 0.13%, to trade at $1,196.90 a troy ounce, while silver futures for March delivery dropped 7.1 cents, or 0.43% to trade at $16.38 an ounce.
Gold prices are likely to remain vulnerable in the near-term amid indications a strengthening U.S. economic recovery will force the Federal Reserve to start raising interest rates sooner and faster than previously thought.
In the week ahead, the U.S. is to release a string of economic reports on Wednesday due to Thursday’s Thanksgiving holiday, including a look at unemployment claims and durable goods orders.
The euro remained under pressure after European Central Bank President Mario Draghi reiterated on Friday that the central bank is ready to expand its stimulus program to raise inflation as quickly as possible.
The ECB's current stimulus program includes purchases of asset-backed securities and covered bonds, though markets are keeping a close eye out for plans to announce purchases of government debt, a stimulus tool known as quantitative easing.
Expectations of monetary stimulus tend to benefit gold, as the metal is seen as a safe store of value and inflation hedge.