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Copper tumbles to 3-week low after China home price data

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Shutterstock photo - - Copper futures tumbled to a three-week low on Wednesday, as mounting concerns over the health of China's property sector dampened appetite for the red metal.

The National Bureau of Statistics said in a report earlier in the day that home prices in China declined in 66 of the 70 cities tracked by the government in February from a month earlier.

New home prices slumped 5.7% on year last month, following a decline of 5.1% in January.

A cooler property sector not only weighs on demand for copper as construction material, but also dampens consumption from the home appliances sector.

On the Comex division of the New York Mercantile Exchange, copper for May delivery tumbled 5.2 cents, or 1.99%, to trade at $2.581 a pound during European morning hours after hitting an intraday low of $2.568, a level not seen since February 24.

Futures were likely to find support at $2.561, the low from February 23, and resistance at $2.676, the high from March 17.

A day earlier, copper lost 3.4 cents, or 1.29%, to close at $2.633 as concerns over a slowdown in demand from top consumer China weighed.

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

Elsewhere on the Comex, gold futures for April delivery ticked down $1.50, or 0.13%, to trade at $1,146.70 a troy ounce, while silver futures for May delivery dipped 10.1 cents, or 0.65% to trade at $15.47 an ounce.

Market participants were looking ahead to Wednesday's Federal Reserve statement to see if it would drop its reference to being "patient" before raising rates.

Traders would interpret such a move as a sign that the central bank could raise rates as early as its June monetary policy meeting.

Fed Chair Janet Yellen is to hold what will be a closely watched press conference 30 minutes after the release of the statement.

Expectations of higher borrowing rates going forward is considered bearish for gold, as the precious metal struggles to compete with yield-bearing assets when rates are on the rise.

The U.S. dollar index, which measures the greenback's strength against a trade-weighted basket of six major currencies, fell 0.2% to 99.84, moving away from recent 12-year peak of 100.77. offers an extensive set of professional tools for the financial markets.

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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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