Forexpros – Copper futures declined on Monday, falling to a six-day low as lingering concerns over the euro zone’s sovereign debt crisis continued to weigh on market sentiment, dampening demand for riskier assets.
On the Comex division of the New York Mercantile Exchange, copper futures for March delivery traded at USD3.421 a pound during European morning trade, shedding 0.4%.
It earlier fell by as much as 1.6% to trade at USD3.378 a pound, the lowest since December 29.
Markets were looking forward to a meeting between German Chancellor Angela Merkel and French President Nicolas Sarkozy in Berlin later in the day in order to discuss proposals to increase fiscal coordination in the single currency bloc.
Sentiment remained on the back foot amid concerns over rising borrowing costs in the euro zone, as markets looked ahead to government debt auctions by Spain and Italy later in the week.
Bond auctions have become key drivers of risk sentiment in recent weeks, as traders attempt to gauge the ability of indebted euro zone nations to fund themselves.
Europe as a region is second after China in global demand for the industrial metal and worries over its economic growth have kept copper prices under pressure in recent months.
Meanwhile, Japan’s Nikkei business daily reported over the weekend that the Chinese government was expected to cut its economic growth target to 7% for 2012, which would be a downgrade from the 8% target issued over the last eight years.
China is the world’s largest copper consumer, accounting for almost 40% of world consumption last year. Prices lost 23% in 2011 as a deepening euro zone debt crisis and fears over a ‘hard landing’ in China pushed investors to liquidate assets such as industrial metals.
Prices found support after two workers at Freeport-McMoran’s Grasberg mine in Indonesia were killed earlier Monday in a shooting near the site, according to a spokesman for the company’s local unit.
Workers at the mine, which is one of the world’s largest, returned to work last week following a three-month strike. In 2010, Freeport sold 1.2 billion pounds of copper from Grasberg.
Elsewhere on the Comex, gold for February delivery rose 0.24% to trade at USD1,620.65 a troy ounce, while silver for March delivery jumped 1.1% to trade at USD29.00 a troy ounce.
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