Forexpros – Copper futures declined on Thursday, as some mild profit taking ensued following the previous day’s rally that took prices to a four-week high while concerns over a slowdown in demand from top consumer China also weighed.
On the Comex division of the New York Mercantile Exchange, copper futures for March delivery traded at USD3.562 a pound during European morning trade, shedding 0.38%.
It earlier fell by as much as 0.72% to trade at a daily low of USD3.525 a pound.
Copper prices soared nearly 5.5% on Wednesday after six major central banks, including the Federal Reserve and the European Central Bank agreed to lower dollar swap rates to prevent a lack of liquidity in the global financial system.
The surprise announcement came after the People’s Bank of China said that it cut banks reserve requirement ratios by 0.5%, in an effort to help boost liquidity and support the world’s second largest economy amid global market turmoil.
However, the rally prompted some investors to sell their position and lock in gains amid ongoing concerns over a slowdown in demand from China.
Official data released earlier showed that Chinese manufacturing activity contracted in November for the first time in nearly three years as export orders fell sharply.
Separately, a final reading of the country’s HSBC manufacturing PMI for November fell more than initially expected, declining to 47.7 from a preliminary estimate of 48.0 and down from 51.0 in October.
China is the world’s largest copper consumer, accounting for almost 40% of world consumption last year.
Meanwhile, downbeat comments by European Central Bank President Mario Draghi earlier also weighed on sentiment.
Speaking at the European Parliament in Brussels, Draghi said downside risks to the economic outlook have increased, adding that the bank’s temporary measures are only limited.
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 weeks.
Elsewhere on the Comex, gold for February delivery rose 0.4% to trade at USD1,757.35 a troy ounce, while silver for March delivery jumped 1.7% to trade at USD33.35 a troy ounce.
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