Copper futures slump to 5-1/2 year low after Greece vote

Investing.com - Copper prices fell to the lowest level in more than five years on Monday, as traders were cautious after Greek anti-austerity party Syriza swept to victory in elections on Sunday, reviving concerns over the country's future in the euro zone.

On the Comex division of the New York Mercantile Exchange, copper for March delivery hit a session low of $2.420 a pound, a level not seen since June 2009, before trading at $2.446 during European morning hours, down 5.5 cents, or 2.21%.

On Friday, copper tumbled 7.7 cents, or 2.99%, to settle at $2.501. Comex copper lost 11.6 cents, or 4.43%, last week, the second straight weekly decline.

The red metal is down approximately 13.5% so far in January as concerns over the global economic outlook and the impact on future demand prospects dampened the appeal of the commodity.

Futures were likely to find support at the $2.400-level and resistance at $2.585, the high from January 23.

Syriza's leader Alexis Tsipras has pledged to renegotiate the terms of Greece's €240 billion bailout and reverse many of the austerity measures imposed by the European Union and International Monetary Fund, raising the possibility of a major conflict with euro zone partners.

The euro fell to an 11-year low of $1.1098 against the greenback before recovering to $1.1227.

The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was steady at 95.35, not far from Friday’s more than 11-year highs of 95.77.

Elsewhere on the Comex, gold futures for April delivery shed $9.00, or 0.7%, to trade at $1,284.60 a troy ounce, while silver futures for March delivery dipped 24.7 cents, or 1.35% to trade at $18.05 an ounce.

Gold is up almost 9% so far in 2015, while silver gained nearly 15%, as investors sought safety from volatility in global financial markets.

In the week ahead, investors will be awaiting the outcome of Wednesday’s Federal Reserve policy meeting for further clarification on when interest rates might start to rise.

Friday’s preliminary data on U.S. fourth quarter growth will also be in focus.