Copper edges lower after U.S. government shutdown, China PMI

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Investing.com - Copper futures edged lower on Tuesday, as investors digested disappointing manufacturing data out of China and after U.S. lawmakers missed a deadline to avert a government shutdown.

On the Comex division of the New York Mercantile Exchange, copper futures for December delivery traded at USD3.314 a pound during European morning trade, down 0.3%.

Copper prices traded in a range between USD3.313 a pound, the daily low and a session high of USD3.337 a pound. The December contract settled 0.2% lower at USD3.323 a pound on Monday.

Copper prices were likely to find support at USD3.261 a pound, the low from September 26 and resistance at USD3.359 a pound, the high from September 20.

In China, government data released earlier in the day showed that the nation's official manufacturing purchasing managers' index inched up to 51.1 in September from 51.0 in August, missing forecasts for 51.5.

The disappointing data indicated that the recovery in the world's second largest economy remains fragile.

Copper traders consider shifts in the PMI an indicator of China's copper demand, as the industrial metal is widely used by the sector.

The Asian nation is the world's largest copper consumer, accounting for almost 40% of world consumption last year.

Separately, the U.S. government began a partial shutdown after lawmakers failed to reach an agreement on a new budget before Monday's midnight deadline. It is the first government shutdown in the U.S. since 1996.

Lawmakers are expected to continue negotiating a funding measure later in the day in hopes of reaching a compromise.

Republicans have insisted on delaying the implementation of President Obama's health care reforms as a condition for passing the budget.

Later this month, Congress will have to extend the U.S. debt ceiling which the U.S. Treasury Department has estimated will be reached by October 17.

Moody's Investors Service warned that a failure to raise the debt limit would result in a worse outcome for financial markets than a government shutdown.

Elsewhere on the Comex, gold for December delivery advanced 0.4% to trade at USD1,332.20 a troy ounce, while silver for December delivery inched up 0.45% to trade at USD21.81 a troy ounce.

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This article appears in: Investing , Forex and Currencies

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As of 12/17/2014, 04:15 PM


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