Copper slumps to 8-week low after weak German GDP data

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Investing.com - Copper futures extended losses to hit an eight-week low on Thursday, following the release of disappointing economic data from Germany.

On the Comex division of the New York Mercantile Exchange, copper for September delivery declined 0.18%, or 0.6 cents, to trade at $3.106 a pound during European morning hours.

Prices fell to a session low of $3.105 a pound earlier, the weakest level since June 20.


A day earlier, copper futures lost 1.35%, or 4.2 cents, to settle at $3.112 a pound after disappointing monthly data cast doubt over the Chinese economy.

Futures were likely to find support at $3.072, the low from June 20 and resistance at $3.157, the high from August 13.

Germany's gross domestic product shrank by 0.2% in the three months to June, the first drop since 2012. Economists had forecasts a contraction of 0.1%. First quarter growth was also revised down to 0.7% from 0.8% previously.

Earlier Thursday official data showed that French GDP was flat in the second quarter, the second consecutive quarter of stagnation. Economists had expected an expansion of 0.1%.

Europe as a region is third in global demand for the industrial metal.

Meanwhile, concerns over the health of China's economy mounted on Wednesday after data showed that industrial production there rose at an annualized rate of 9% in July, slowing from an increase of 9.2% a month earlier.

Fixed asset investment, which tracks construction activity, increased 17.0% in the January-July period, below expectations for a gain of 17.4%.

Chinese bank lending and money supply growth for July also came in below expectations, underlining concerns about slowing growth in the world's biggest consumer of the industrial metal.

New loans dropped to 385.2 billion yuan last month from 1.08 trillion yuan in June, while social financing aggregate, a broad measure of liquidity in the economy, fell to 273.1 billion yuan, the lowest monthly reading since October 2008.

Copper prices have been on a downward trend in recent weeks amid indications of a slowdown in demand from China, the world's largest consumer of the industrial metal.

Official trade data released August 8 showed that China's copper arrivals fell 2.9% month-on-month in July, declining for a third straight month.

Elsewhere on the Comex, gold for December delivery dipped 0.07%, or 90 cents, to trade at $1,313.60 a troy ounce, while silver for September delivery shed 0.06%, or 1.2 cents, to trade at $19.83 an ounce.

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