Copper futures drop as profit taking, U.S. debt concerns weigh

Shutterstock photo - Copper futures declined during European morning hours on Monday, as focus remained squarely on the U.S. economic outlook and how U.S. lawmakers will deal with the upcoming debt ceiling debate.

Some profit taking also contributed to losses, after New York-traded copper prices rallied to the highest level since mid-October last week.

On the Comex division of the New York Mercantile Exchange, copper futures for March delivery traded at USD3.666 a pound during European morning trade, down 0.75% on the day.

New York-traded copper prices fell by as much as 1% earlier in the session to hit a daily low of USD3.657 a pound. Futures rose to USD3.758 on January 3, the strongest level since October 18.

Copper futures rallied last week after U.S. lawmakers passed a last-minute bill to avoid the fiscal cliff, a series of looming tax increases and spending cuts that could have pushed the U.S. economy back into a recession.

Focus was expected to remain on the U.S. economy, as investors remained jittery over the longer term fiscal outlook, with negotiations on raising the U.S. debt ceiling still to come in February.

On Friday, the U.S. Department of Labor said the economy added 155,000 jobs in December, easing from an increase of 161,000 in November, suggesting that the recovery in the labor market may be slowing. The unemployment rate held steady at 7.8%.

The jobs report came one day after the minutes of the Federal Reserves' December policy meeting showed that some policymakers considered an earlier-than-expected end to the bank's quantitative easing program.

A strengthening U.S. dollar contributed to losses. The dollar index, which tracks the performance of the greenback against a basket of six other major currencies, was up 0.2% to trade at 80.77.

A stronger dollar reduces demand for raw materials as an alternative investment and makes dollar-priced commodities more expensive for holders of other currencies.

Elsewhere on the Comex, gold for February delivery added 0.3% to trade at USD1,654125 a troy ounce, while silver for March delivery rose 0.6% to trade at USD30.12 a troy ounce. - offers an extensive set of professional tools for the Forex, Commodities, Futures and the Stock Market including real-time data streaming, a comprehensive economic calendar, as well as financial news and technical & fundamental analysis by in-house experts.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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