Investing.com - Copper prices fell to a one-week low during Europe trade on Monday, as the release of weak Chinese manufacturing activity data underlined concerns over the health of the world’s second largest economy.
Copper traders view Chinese factory activity as an indicator of the nation's copper demand, as the red metal is widely used by the sector.
The official China manufacturing purchasing managers' index fell to a three-year low of 49.4 in January from 49.7 a month earlier, falling short of expectations for 49.6.
Meanwhile, the Caixin manufacturing purchasing managers’ index came in at 48.4 last month, contracting for the 11th straight month.
The downbeat data underlined worries the world's second largest economy may still be losing momentum despite a raft of stimulus measures in recent months.
Copper for March delivery on the Comex division of the New York Mercantile Exchange fell to an intraday low of $2.033 a pound, the weakest level since January 26, before trading at $2.036 by 7:55GMT, or 2:55AM ET, down 2.5 cents, or 1.22%.
The red metal lost 3% in January as investors slashed copper holdings amid persistent worries over an economic slowdown in China. The Asian nation is the world’s largest copper consumer, accounting for nearly 45% of world consumption.
Elsewhere in metals trading, gold held near a three-month high during morning hours in London, amid speculation worries over slowing growth in the U.S. will prompt the Federal Reserve to delay future interest rate hikes.
Market participants are anticipating just one more rate hike this year, most likely in July, compared with four according to Fed policymakers' guidance. A gradual path to higher rates is seen as less of a threat to gold prices than a swift series of increases.
The Commerce Department said Friday that the U.S. economy grew at an annual rate of 0.7% in the fourth quarter, missing expectations for growth of 0.8% and slowing from 2.0% in the preceding quarter.
In the week ahead, investors will be focusing on U.S. nonfarm payrolls data for January to gauge if the world's largest economy is strong enough to withstand further rate hikes in 2016.