Copper falls to 2-week low as China liquidity concerns overshadow PMI
Investing.com - " Copper futures fell to a two-week low on
Thursday, as stronger-than-expected Chinese manufacturing data
failed to offset concerns over tightening liquidity conditions in
the country's banking sector.
China is the world's largest copper consumer, accounting for almost 40% of world consumption last year.
On the Comex division of the New York Mercantile Exchange, copper futures for December delivery traded at USD3.262 a pound during European morning trade, down 0.15%.
Copper prices fell to a session low of USD3.255 a pound earlier, the weakest level since October 14.
The December contract ended 2.04% lower on Wednesday to settle at USD3.267 a pound.
Copper prices were likely to find support at USD3.244 a pound, the low from October 14 and resistance at USD3.334 a pound, the high from October 23.
Data released earlier showed that China's HSBC manufacturing index for October rose to a seven-month high of 50.9, up from a final reading of 50.2 in September. Economists had expected the index to tick up to 50.5.
However, sentiment remained weak amid concerns over a cash crunch in the Chinese financial system after interbank lending rates moved higher for a second day.
Investors now looked ahead to the release of key U.S. economic data later in the day to help assess the timing for a reduction in the Federal Reserve's bond purchasing program.
The U.S. was to produce data on initial jobless claims and new home sales later Thursday.
Official data released earlier in the week showed that the U.S. economy added 148,000 jobs in September, well below expectations for an increase of 180,000.
The unemployment rate ticked down to a four-and-a-half year low of 7.2% from 7.3% in August, but this was partially due to more people dropping out of the labor force.
The disappointing data bolstered expectations that the Fed would postpone plans to start scaling back its asset purchase program until next year.
The Fed's stimulus program is viewed by many investors as a key driver in boosting the price of commodities as it tends to depress the value of the dollar.
Elsewhere on the Comex, gold for December delivery inched up 0.15% to trade at USD1,336.00 a troy ounce, while silver for December delivery added 0.2% to trade at USD22.65 a troy ounce.
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