Forexpros – Copper futures were mildly lower during European morning trade on Wednesday, ahead of the outcome of a policy-setting meeting by the Federal Reserve later in the day, while investors continued to focus on developments in the euro zone.
On the Comex division of the New York Mercantile Exchange, copper futures for July delivery traded at USD3.421 a pound during European morning trade, shedding 0.4%.
The July contract traded in between a tight range of USD3.433 a pound, the daily high and a session low of USD3.410 a pound.
The Fed’s two-day meeting concludes later Wednesday, amid growing hopes policy makers will announce measures to stimulate the world’s largest economy after a recent string of weak economic data.
A growing number of Fed watchers expect the central bank to extend its Operation Twist program, in which it sells short-term bonds to buy long-term ones. The current USD400 billion Twist program is set to expire at the end of June.
The Fed’s Open Market Committee will release a policy statement at the end of the meeting. The announcement was to be followed by a press conference with Fed Chairman Ben Bernanke to discuss the monetary policy decision.
Meanwhile, markets continued to monitor developments in Greece, where political leaders were attempting to form a solid coalition government.
Spain’s deteriorating fiscal health remained in focus. The yield on Spanish 10-year bonds eased back to just below the critical 7% threshold, after climbing to euro-era highs earlier in the week, amid fears that Madrid will be forced to seek a full-fledged international bailout.
Europe as a region is second in global demand for the industrial metal. Prices have tracked investor sentiment toward the euro zone’s debt crisis in recent months.
Copper prices have been on a rapid decline since the start of May, losing nearly 12% amid growing fears over an escalating debt crisis in the euro zone and a deeper-than-expected slowdown in China.
A deeper slowdown in China, the world’s second biggest economy, would impair a global expansion that is already faltering because of debt crisis in the euro zone.
Elsewhere on the Comex, gold for August delivery eased down 0.25% to trade at USD1,619.25 a troy ounce, while silver for July delivery was flat to trade at USD28.38 a troy ounce.
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