Investing.com - Copper prices declined on Tuesday, as jitters over a bond default in China's construction sector weighed.
On the Comex division of the New York Mercantile Exchange, copper for May delivery hit a session low of $2.706 a pound, the weakest level since April 15, before trading at $2.726 during European morning hours, down 0.6 cents, or 0.24%.
Futures were likely to find support at $2.668, the low from April 15, and resistance at $2.829, the high from April 20.
Shenzhen-based Kaisa Group Holdings became the first Chinese property developer to default on its dollar bonds after it confirmed it had failed to pay a coupon on two senior notes on Monday.
Concerns over domestic bond defaults stoked investor worries that financing deals, which have locked up vast quantities of copper, could unravel.
A cooler property sector not only weighs on demand for copper as construction material, but also dampens consumption from the home appliances sector.
A day earlier, copper lost 4.1 cents, or 1.5%, to close at $2.732 as a positive impact of a cut in China's bank reserve requirements faded.
The People's Bank of China lowered the amount of deposits it requires banks to hold as reserves to 18.5% from 19.5%, in an effort to boost lending and spur economic activity.
The move came after official data last week showed that China’s economy grew 7.0% in the first quarter, the slowest pace of growth since the global financial crisis in 2008.
China is the world’s largest copper consumer, accounting for almost 40% of world consumption.
Elsewhere, gold futures for June delivery tacked on $1.50, or 0.13%, to trade at $1,195.20 a troy ounce, while silver futures for May delivery inched up 10.4 cents, or 0.65% to trade at $15.99 an ounce.
The dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was up 0.5% to trade at 98.65 early on Tuesday.
The dollar remained firmer after falling against the other major currencies last week when a run of soft economic data saw investors push back expectations on the timing of a rate hike by the Federal Reserve.
Meanwhile, concerns over the lack of an agreement on economic reforms for bailout funds between Greece and its creditors remained in focus, fuelling fears that the country could default on its debt be forced out of the euro zone.