Forexpros – Copper futures fell to the lowest level in a week during European morning hours on Monday, as ongoing concerns over the health of the global economy reduced the appeal of growth-linked assets.
On the Comex division of the New York Mercantile Exchange, copper futures for September delivery traded at USD3.360 a pound during European morning trade, losing 1%.
It earlier fell by as much as 1.15% to trade at a session low of USD3.358 a pound, which was the lowest since August 6.
Market sentiment weakened after preliminary data showed that Japan’s economy grew by a modest 0.3% in the April-to-June period, disappointing expectations for a 0.6% increase, as export demand was hit by the euro zone debt crisis.
On an annualized basis, the country’s gross domestic product rose 1.4% in the second quarter, below forecasts for growth of 2.3% and slowing sharply from an upwardly revised 5.5% in the preceding quarter.
The report came after data on Friday showed that Chinese exports grew just 1.0% on the year in July, down sharply from the 11.3% gain seen in June, while imports rose 4.7% year-over-year, down from 6.3% in June.
China is the world’s largest copper consumer, accounting for almost 40% of world consumption last year. A deeper slowdown in China would impair a global expansion that is already faltering because of the euro zone’s ongoing debt crisis.
The industrial metal is sensitive to the global economic outlook because of its widespread uses in construction and manufacturing.
Prices remained supported amid ongoing expectations that central banks in the U.S., Europe and China will soon announce additional stimulus measures to help spur growth in their respective economies.
The Federal Reserve has said it stands prepared to intervene while European Central Bank President Mario Draghi has said monetary policy officials will do whatever it takes to bolster the economy.
There are also expectations in the market that China will cut its banks’ reserve requirement ratio following the release of a flurry of mostly downbeat data last week.
Elsewhere on the Comex, gold for October delivery eased up 0.2% to trade at USD1,623.45 a troy ounce, while silver for September delivery shed 0.25% to trade at USD27.99 a troy ounce.
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