Copper futures fall more than 1% amid gloomy demand outlook

Investing.com - Copper prices declined for the second consecutive session on Wednesday, as concerns over the global economic outlook and the impact on future demand prospects dampened the appeal of the commodity.

On the Comex division of the New York Mercantile Exchange, copper for March delivery slumped 4.2 cents, or 1.62%, to trade at $2.552 a pound during European morning hours, after hitting a session low of $2.549.

A day earlier, copper shed 2.3 cents, or 0.88%, to settle at $2.594 a pound. Copper hit $2.423 on January 14, a level not seen since June 2009.

Futures were likely to find support at the $2.517, the low from January 15, and resistance at $2.636, the high from January 20.

The International Monetary Fund cut its 2015 global growth forecast on Tuesday to 3.5% from a previous estimate of 3.8%, citing slowing economies in China, Russia, the euro zone and Japan.

Meanwhile, data showed that China’s economy grew 7.4% in 2014 from a year earlier, below the government's official target of 7.5% and the slowest pace since 1990. It expanded 7.7% in 2013.

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

Copper is sensitive to the economic growth outlook because of its widespread uses across industries. The red metal is down approximately 10% so far in January.

Elsewhere on the Comex, gold futures for February delivery tacked on $7.10, or 0.55%, to trade at $1,301.30 a troy ounce, while silver futures for March delivery jumped 27.7 cents, or 1.54% to trade at $18.23 an ounce.

Gold is up 10% so far in 2015, while silver gained almost 15%, as investors sought safety from volatility in global financial markets.

Meanwhile, the euro remained under pressure amid mounting expectations that the European Central Bank will launch a government bond-buying program at its meeting on Thursday, in a bid to stave off the threat of deflation in the euro area.

The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, declined 0.3% to 93.08.

Later in the day, the U.S. was to release data on building permits and housing starts, as investors look for further indications on the strength of the economy.