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Copper tumbles 2% as markets brace for gloomy China GDP

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Investing.com -

Investing.com - Copper fell sharply on Monday, as investors looked ahead to a raft of Chinese economic data due on Tuesday for further indications on the strength of the economy and the future path of monetary policy.

On the Comex division of the New York Mercantile Exchange, copper for March delivery slumped 5.1 cents, or 1.93%, to trade at $2.567 a pound during U.S. morning hours.

Trade volumes were expected to remain light on Monday, with U.S. markets closed for a holiday.

On Friday, copper climbed 5.9 cents, or 2.31%, to settle at $2.617 a pound, as investors closed out bets on lower prices. Copper hit $2.423 on January 14, a level not seen since June 2009.

Futures were likely to find support at the $2.540, the low from January 16, and resistance at $2.729, the high from January 13.

China is to release data on fourth quarter gross domestic product on Tuesday, as well as reports on industrial production, retail sales and fixed-asset investment for December.

Market analysts expect China's economy to grow 7.2% in the three months ending December 31, down from growth of 7.3% in the preceding quarter.

Recent economic data from the Asian nation has indicated that the recovery remains fragile and may require further monetary stimulus.

China is the world's largest copper consumer, accounting for almost 40% of world consumption.

Elsewhere, gold futures for February delivery tacked on $2.00, or 0.16%, to trade at $1,278.90 a troy ounce, while silver futures for March delivery inched up 5.0 cents, or 0.28% to trade at $17.80 an ounce.

Meanwhile, the euro remained under pressure amid mounting expectations that the European Central Bank will launch a government bond-buying program at its meeting on Thursday, in a bid to stave off the threat of deflation in the euro area.

Last Thursday, the Swiss National Bank abandoned its three-year old 1.20 per euro exchange rate cap in a shock move, signaling that it expects the ECB to act this week.

The move roiled financial markets and saw the Swiss franc strengthen across the board.

The U.S. dollar index, which measures the greenback's strength against a trade-weighted basket of six major currencies, dipped 0.25% to 92.82.

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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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