Copper moves lower ahead of U.S. GDP data, Fed outcome

Investing.com - Copper prices fell for the first time in four sessions on Wednesday, as investors looked ahead to key U.S. economic data while awaiting the outcome of the Federal Reserve's policy meeting.

On the Comex division of the New York Mercantile Exchange, copper for July delivery shed 2.2 cents, or 0.8%, to trade at $2.764 a pound during European morning hours.

A day earlier, copper hit $2.794, the strongest level since April 20, before ending at $2.786, up 0.9 cents, or 0.34%, on hopes of more monetary stimulus from China.

Futures were likely to find support at $2.694, the low from April 24, and resistance at $2.829, the high from April 20.

Investors were looking ahead to preliminary data on first quarter U.S. economic growth and a report on pending home sales later in the day for further indications on the strength of the recovery, ahead of the Federal Reserve's policy announcement.

A recent run of disappointing U.S. economic data dampened optimism over the recovery, fuelling speculation the Fed could delay hiking interest rates until late 2015, instead of tightening midyear.

The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was up 0.05% to trade at 96.23 early on Wednesday, after hitting an intraday low of 96.11, the weakest level since March 18.

The dollar weakened broadly on Tuesday after data showing that U.S. consumer confidence deteriorated last month added to the expectations that the Fed will leave interest rates on hold at current record lows for longer.

The Conference Board reported that its consumer confidence index slumped to 95.2 in April, well below the forecast of 102.5 and down from 101.4 in March. Inflation rate expectations were the lowest since February 2007.

Copper remained supported amid speculation policymakers in China will have to introduce further stimulus measures to jumpstart the economy amid lackluster growth.

Since November, the People's Bank of China has introduced a series of stimulus measures, including lowering interest rates twice and cutting the reserve requirement ratios of major banks twice, in order to spur economic activity and boost growth.

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

Elsewhere, gold futures for June delivery slipped $5.90, or 0.49%, to trade at $1,208.90 a troy ounce, while silver futures for July delivery slumped 12.5 cents, or 0.75% to trade at $16.50 an ounce.

Meanwhile, market sentiment remained underpinned amid optimism that Greece is moving closer to reaching an agreement with its creditors on a package of economic reforms for bailout funds.

Athens must pay €780 million due to the International Monetary Fund on May 12, fuelling fears that the country could default on its debt be forced out of the euro zone.