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Copper off lows after China PMI, gold moves higher

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Shutterstock photo - Copper futures were hovering close to one-and-a-half month highs on Wednesday after initially declining on the back of weak Chinese manufacturing data, while gold was also trading close to six-week highs.

On the Comex division of the New York Mercantile Exchange, copper for September delivery traded at USD3.207 a pound, during European morning hours, 0.26% higher for the day.

Copper futures fell 1.24% to lows of USD3.165 during the Asian session after data showed that Chinese manufacturing activity slumped to an 11-month low in July, adding to signs of a slowdown in the world's second largest economy.

The preliminary reading of China's HSBC manufacturing purchasing managers' index fell to 47.7 in July, from a final reading of 48.2 last month. Analysts had expected the index to rise to 48.6. A reading below 50 indicates a contraction.

Copper continued to be supported after China's premiere said Tuesday that economic growth must remain above 7%. Last week's China's central bank said it was removing the lower limit on interest rates for banks, to help spur growth.

Gold futures for August delivery traded at USD1,343.05 a troy ounce during European morning hours, 0.63% higher for the day.

Comex gold rallied to a six-week high of USD1,347.85 a troy ounce on Tuesday, as a bout of technical buying kicked in after prices broke above a key resistance level.

Gold futures have been boosted in recent sessions as investors trimmed back expectations that the Federal Reserve will start tapering its asset purchase program later this year following recent weak U.S. data.

Fed Chairman Ben Bernanke said last week that the pace of the bank's bond purchases would depend on U.S. economic health.

An exit from the stimulus would deal a heavy blow to gold, which has thrived on demand from investors who buy gold to hedge against the inflationary risks of loose monetary policies.

Elsewhere on the Comex, silver for September delivery was up 0.46% to trade at USD20.345 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.

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