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Copper futures edge lower as Japan enters recession

Published 11/17/2014, 05:01 AM
Updated 11/17/2014, 05:01 AM
Copper declines after Japan enters surprise recession

Investing.com - Copper futures edged lower on Monday, after data showed that Japan unexpectedly slipped into recession, fuelling concerns over the global economic outlook.

On the Comex division of the New York Mercantile Exchange, copper for December delivery shed 1.3 cents, or 0.43% to trade at $3.034 a pound during European morning hours.

Futures were likely to find support at $2.985, the low from November 14, and resistance at $3.074, the high from November 4.

Concerns over the global economic outlook were amplified after data showed that Japan’s economy contracted by an annualized 1.6% in the third quarter, following a 7.3% decline in the previous quarter. Economists had forecast a 2.3% increase.

Copper is sensitive to the economic growth outlook because of its widespread uses across industries.

Elsewhere on the Comex, gold futures for December delivery inched up $2.40, or 0.2%, to trade at $1,188.00 a troy ounce, while silver futures for December delivery lost 13.2 cents, or 0.81% to trade at $16.18 an ounce.

Investors looked ahead to key U.S. economic data later in the day for further indications on the strength of the economy and the future course of monetary policy.

The U.S. was to release a report on manufacturing activity in the New York region, as well as data on industrial production.

Comex gold prices have been under heavy selling pressure in recent weeks amid speculation the Federal Reserve is moving closer to raising interest rates for the first time in eight years after ending its monthly bond-buying program, also known as quantitative easing, last month.

Expectations of higher borrowing rates going forward is considered bearish for gold, as the precious metal struggles to compete with yield-bearing assets when rates are on the rise.

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