Investing.com - Copper prices fell sharply on Tuesday, as market players looked ahead to key economic data later in the week which could provide more evidence of a slowdown in China.
Copper for September delivery on the Comex division of the New York Mercantile Exchange shed 3.1 cents, or 1.22%, to trade at $2.514 a pound during European morning hours. Prices of the red metal slumped to a six-year low of $2.381 on July 8.
China is to release data on second quarter gross domestic product on Wednesday, as well as reports on industrial production, retail sales and fixed-asset investment for June.
Market analysts expect China's economy to grow 6.9% in the three months ending June 30, down from growth of 7.0% in the preceding quarter.
Recent economic data from the Asian nation has indicated that the recovery remains fragile and may require further monetary stimulus.
China is the world’s largest copper consumer, accounting for almost 40% of world consumption.
Elsewhere, gold futures for August delivery dipped $2.00, or 0.17%, to trade at $1,153.40 a troy ounce, while silver futures for September delivery slumped 14.0 cents, or 0.91% to trade at $15.31 an ounce.
Investors looked ahead to U.S. retail sales data later in the session for further indications on the strength of the economy and the timing of an interest rate hike.
The Commerce Department is expected to report that retail sales rose by 0.2% in June, after rising 1.2% in May. Core sales are forecast to gain 0.5%, after increasing 1.0% in May. The U.S. is also to release data on import prices and business inventories later Tuesday.
Wednesday’s testimony by Federal Reserve Chair Janet Yellen to the Senate Banking Committee will also be closely watched for any indication on when U.S. interest rates may start to rise.
Last week, Fed Chair Yellen said that the central bank is on track to raise interest rates at some point this year, but warned over weakness in the labor market.
Gold prices have been under pressure in recent weeks amid indications that the U.S. economy is regaining strength after a recent bout of weakness, supporting the case for higher interest rates later this year.
Expectations of higher borrowing rates going forward is considered bearish for gold, as the precious metal struggles to compete with yield-bearing assets when rates are on the rise.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was last at 97.09, up 0.15% for the day.
The euro fluctuated between small gains and losses as investors waited to see if the Greek parliament would support harsh austerity measures demanded by the country’s creditors in exchange for a deal to avoid financial collapse.
Greek Prime Minister Alexis Tsipras was to meet with MP's on Tuesday, but faced an uphill battle to win support for a third bailout deal offered by the country’s creditors.
Four pieces of legislation must be passed by the end of the day on Wednesday, including pension and sales tax reforms.