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Copper under pressure amid China slowdown concerns

Published 01/27/2015, 05:07 AM
Updated 01/27/2015, 05:07 AM
© Reuters.  Copper futures decline as China slowdown concerns weigh

© Reuters. Copper futures decline as China slowdown concerns weigh

Investing.com - Copper declined on Tuesday, after data showed that profits at Chinese industrial companies fell the most since 2011, underlining concerns over the health of the world's second largest economy.

On the Comex division of the New York Mercantile Exchange, copper for March delivery shed 2.7 cents, or 1.06%, to trade at $2.516 a pound during European morning hours.

A day earlier, copper hit $2.419 a pound, a level not seen since June 2009, before turning higher to settle at $2.543, up 4.1 cents, or 1.66%.

Futures were likely to find support at the $2.419, the low from January 26, and resistance at $2.585, the high from January 23.

More evidence of a slowdown in China emerged after data released earlier showed mainland China industrial profits fell 8% in December from a year earlier, compared with a 4.2% drop in November.

Last week, a report showed that China’s economy grew 7.4% in 2014 from a year earlier, below the government's official target of 7.5% and the slowest pace since 1990.

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

The red metal is down approximately 11% so far in January as concerns over the global economic outlook and the impact on future demand prospects dampened the appeal of the commodity.

Elsewhere on the Comex, gold futures for April delivery picked up $3.50, or 0.27%, to trade at $1,283.90 a troy ounce, while silver futures for March delivery dipped 2.1 cents, or 0.12% to trade at $17.96 an ounce.

Meanwhile, the euro was higher against the dollar, after hitting an 11-year low in the previous session, as fears sparked by anti-austerity Syriza party's victory in Sunday's Greek elections subsided.

The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, dipped 0.25% to hit 95.04, after touching a more than 11-year high of 95.77 last Friday.

Market players are looking ahead to the start of the Federal Reserve's two-day policy meeting later in the day, for further clarification on when interest rates might start to rise.

Later in the day, the U.S. was to release data on durable goods orders, as well as private sector reports on consumer confidence and new home sales for further indications on the strength of the economy.

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