Forexpros – Copper futures fell for the first time in six days on Monday, retreating from a four-month high as a broadly stronger U.S. dollar prompted investors to take profits as markets awaited the outcome of talks on a Greek debt swap deal, while disappointment over a lack of policy easing from Beijing also weighed.
On the Comex division of the New York Mercantile Exchange, copper futures for March delivery traded at USD3.810 a pound during European morning trade, tumbling 2.03%.
It earlier plunged by as much as 2.45% to trade at USD3.797 a pound, the lowest since January 25. Prices rallied to a four-month high of USD3.939 on Friday.
Concerns over talks aimed at restructuring Greek debt persisted, weighing on market sentiment.
Earlier Monday, German Finance Minister Wolfgang Schaeuble said in the Wall Street Journal that the euro zone may refuse to grant Greece a fresh bailout unless it convinces Europe that it can fully implement commitments attached to earlier bailout packages.
An agreement is necessary for Greece to secure the next tranche of bailout funds in order to prevent a sovereign debt default.
Further weighing on sentiment, the yield on Portuguese 10-year bonds continued to spike higher, hitting a euro-lifetime high of 15.77%, amid renewed fears the country may need a second international bailout.
Investors were also cautious ahead of the European Union summit in Brussels later in the day. The ministers were expected to finalize discussions on a German-led deficit-control treaty and sign off on a EUR500 billion permanent rescue fund to be set up this year.
The euro zone-related concerns boosted demand for the U.S. dollar, which tends to weigh on dollar-denominated copper futures contracts. The dollar index, which tracks the performance of the greenback against a basket of six other major currencies, was up 0.6% to trade at 79.42.
Copper prices came under further pressure after an expected easing in Chinese monetary policy failed to materialize over the week-long Lunar New Year holiday, indicating caution toward more monetary loosening by Beijing.
China is the world’s largest copper consumer, accounting for almost 40% of world consumption last year.
Elsewhere on the Comex, gold for April delivery fell 0.8% to trade at USD1,721.45 a troy ounce, while silver for March delivery tumbled 1.9% to trade at USD33.14 a troy ounce.
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