Forexpros – Copper futures trimmed losses on Thursday, easing off a four-week low after a report showed an unexpected improvement in German business confidence, but concerns over the debt crisis in the euro zone continued to weigh on prices.
On the Comex division of the New York Mercantile Exchange, copper futures for December delivery traded at USD3.298 a pound during European morning trade, slumping 1.05%.
It earlier fell by as much as 1.95% to trade at USD3.205 a pound, the lowest since October 21.
Copper prices came off their lows after German research institute Ifo said that its business climate index rose for the first time in four months in November, climbing to 106.6 from 106.4 in October. Analysts had expected the index to fall to 105.5.
The euro extended gains against the U.S. dollar following the report, boosting the appeal of commodities. The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, was down 0.32% to trade at 79.05.
However, fears the euro zone’s debt crisis was spreading to the region’s core economies saw prices fall to a one-month low during the Asian session.
On Wednesday, Germany’s Treasury failed to reach its maximum sales target of EUR6 billion, auctioning just EUR3.64 billion of 10-year government bonds, its least successful debt sale since the launch of the single currency.
Meanwhile, ratings agency Fitch warned that France could lose its triple-A credit rating if European Union leaders fail to take action to prevent the crisis from worsening.
Weak manufacturing data out of the euro zone and China on Wednesday also weighed. The downbeat global economic outlook prompted U.S. lender Citibank to cut its average copper price outlook, citing a “deteriorating global demand outlook.”
Europe as a region is second after China in global demand for the industrial metal and worries over its debt crisis have kept copper prices under pressure in recent weeks.
Elsewhere on the Comex, gold for December delivery edged 0.1% higher to trade at USD1,699.15 a troy ounce, while silver for December delivery gained 0.55% to trade at USD32.05 a troy ounce.
NYMEX Floor trading was to remain closed for the U.S. Thanksgiving holiday and electronic transactions would be booked with Friday’s trades for settlement purposes.
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