Copper futures reapproach 6-year low on Fed, Greece jitters

Investing.com - Copper prices traded near the lowest level in six years on Thursday, amid indications the Federal Reserve remains on track to raise rates this year and as concerns over Greece's future in the euro zone re-emerged.

On the Comex division of the New York Mercantile Exchange, copper for March delivery lost 3.2 cents, or 1.3%, to trade at $2.447 a pound during European morning hours.

Prices touched a session low of $2.436 earlier. Copper futures hit $2.419 a pound on Monday, a level not seen since June 2009.

A day earlier, copper tacked on 1.7 cents, or 0.69%, to settle at $2.479.

Futures were likely to find support at the $2.419, the low from January 26, and resistance at $2.543, the high from January 27.

The red metal is down approximately 12% so far in January as concerns over the global economic outlook and the impact on future demand prospects dampened the appeal of the commodity.

Following its policy meeting on Wednesday, the Federal Reserve said it would keep rates on hold at least until June and reiterated its pledge to be "patient" on raising interest rates, while acknowledging the solid economic recovery and strong growth in the labor market.

The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, rose 0.1% to 94.98, holding below last Friday’s more than 11-year highs of 95.77.

A stronger U.S. dollar usually weighs on copper, as it makes dollar-priced commodities more expensive for holders of other currencies.

Meanwhile, the euro remained under pressure after Greece’s new government moved Wednesday to roll back deeply unpopular austerity policies underpinning the county’s €240 billion international bailout, fuelling fears over a clash with its international creditors.

Greek borrowing costs continued to climb on Thursday, with the yield on 10-Year government bonds rising above 11%, the highest level since July 2013. Ahead of the election, the 10-year yield was below 9%.

Elsewhere on the Comex, gold futures for April delivery slumped $10.70, or 0.83%, to trade at $1,276.50 a troy ounce, while silver futures for March delivery tumbled 42.3 cents, or 2.34% to trade at $17.66 an ounce.

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 publish the weekly report on initial jobless claims as well as private sector data on pending home sales.

On Friday, the country will release preliminary data on fourth quarter growth, which is expected to show expansion of 3.0%.