Copper futures lower after China factory activity stalls

Investing.com - Copper futures edged lower on Thursday, in the wake of disappointing economic signals from China, where data showed manufacturing activity hit a six-month low in November.

On the Comex division of the New York Mercantile Exchange, copper for December delivery declined 1.5 cents, or 0.48% to trade at $3.031 a pound during European morning hours.

A day earlier, copper rallied 4.3 cents, or 1.43%, to settle at $3.045 a pound amid speculation policymakers around the world will have to introduce further stimulus measures to support the global economy and boost growth.

Futures were likely to find support at $2.990, the low from November 19, and resistance at $3.049, the high from November 19.

Data released earlier showed that the preliminary reading of China’s HSBC manufacturing index slumped to a six-month low of 50.0 in November from 50.4 in October and below forecasts for 50.3.

The data showed that the level of output in factories contracted for the first time in six months in November, underlining concerns over a cooling economy.

Copper traders consider shifts in the HSBC PMI an indicator of China's copper demand, as the industrial metal is widely used by the sector.

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

Elsewhere on the Comex, gold futures for December delivery lost $8.60, or 0.72%, to trade at $1,185.30 a troy ounce, while silver futures for December delivery dropped 18.6 cents, or 1.14% to trade at $16.10 an ounce.

The US dollar was well-supported after minutes of the Federal Reserve's October policy meeting indicated that officials believe the economic recovery is strong enough to withstand external threats to growth, but offered little additional clarity about when rates could start to rise.

Markets are currently expecting the U.S. central bank to start raising rates sometime around September 2015.

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.

Later in the day, the U.S. was to release data on initial jobless claims, consumer prices, existing homes sales and manufacturing activity in the Philadelphia region.