Forexpros – Copper futures added to losses on Thursday, falling to a four-day following a lackluster Spanish bond auction, which saw yields spike to a euro-lifetime high.
On the Comex division of the New York Mercantile Exchange, copper futures for December delivery traded at USD3.434 a pound during European morning trade, tumbling 1.46%.
It earlier fell by as much as 1.8% to trade at USD3.412 a pound, the lowest price since November 11.
Earlier in the day, Spain auctioned EUR3.56 billion of ten-year Treasury bills at an average yield of 6.97%, the highest since the inception of the single currency. On October 20, the Treasury paid a maximum yield of 5.5% on April 2021 bonds.
The lackluster bond, which was viewed as a key test of market appetite for the country’s sovereign debt, added to concerns over Spain’s debt woes.
Markets were also awaiting results on a French government bond auction. The country was to sell up to EUR7 billion in government bonds, amid growing fears that Europe’s debt woes will spread to the region’s core economies.
French 10-year yields hit 3.8% ahead of the auction, a euro-lifetime high.
Meanwhile, Italy continued to remain in focus, with the country’s 10-year government bond yields climbing to 7.15%, a level widely viewed as unsustainable in the long-term.
Markets were also jittery after ratings agency Fitch’s warned late Wednesday that the ratings of major U.S. lenders could be “greatly affected” should Europe’s debt woes worsen.
Despite the recent slump in prices, Wall Street investment bank Morgan Stanley expects copper to rally in 2012, citing resilient demand from Asia for the industrial metal.
In a report published Wednesday, the bank forecast Chinese copper usage to expand 8% in 2012 to 8.58 million tons, compared with 5.2% in 2011.
China is the world’s biggest copper consumer, accounting for nearly 40% of world copper consumption last year.
Elsewhere on the Comex, gold for December delivery dropped 0.95% to trade at USD1,757.45 a troy ounce, while silver for December delivery retreated 1.15% to trade at USD33.43 a troy ounce.
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