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Copper slumps after China PMI disappoints

Published 03/24/2014, 05:08 AM
Updated 03/24/2014, 05:08 AM
Copper falls after downbeat China PMI data

Investing.com - Copper prices declined on Monday, after data showed that manufacturing activity in China slowed to an eight-month low in March, sparking concerns over a slowdown in demand from the world’s largest copper consumer.

On the Comex division of the New York Mercantile Exchange, copper futures for May delivery fell to a session low of $2.922 a pound, before paring losses to last trade at $2.943 a pound during European morning hours, down 0.25%, or 0.7 cents.

Copper rose 0.75%, or 2.2 cents on Friday to settle at 2.950 a pound. Futures were likely to find support at $2.917 a pound, the low from March 21 and resistance at $2.980 a pound, the high from March 21.

Data released earlier showed that China’s HSBC Flash Purchasing Managers Index, the earliest indicator of the country's industrial activity, fell to an eight-month low of 48.1 in March from a final reading of 48.5 in February.

The weaker than expected data fuelled hopes Beijing will unveil fresh stimulus measures to combat slowing growth.

The industrial metal fell to $2.877 a pound on March 19, the lowest since July 2010, amid growing concerns over the health of China’s economy.

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

Meanwhile, in the euro zone, Markit research group said Germany's preliminary manufacturing purchasing managers' index ticked down to a four-month low of 53.8 in March, from 54.8 in February, compared to expectations for a fall to 54.6.

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In France, however, the preliminary manufacturing PMI rose to a 33-month high of 51.9 in March, from 49.7 in February, compared to expectations for an increase to 49.8.

Elsewhere on the Comex, gold for June delivery fell 0.85%, or $11.10, to trade at $1,324.90 a troy ounce, while silver for May delivery lost 0.7%, or 14.2 cents, to trade at $20.16 an ounce.

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