Copper hits 1-week low after Chinese manufacturing PMI disappoints
Investing.com - Copper futures fell to a one-week low on Thursday, as downbeat manufacturing data out of China fuelled concerns over the strength of the world's second largest economy and biggest consumer of the industrial metal.
On the Comex division of the New York Mercantile Exchange, copper futures for March delivery traded at USD3.313 a pound during European morning trade, down 0.7%.
Comex copper prices hit a session low of USD3.310 a pound earlier, the weakest level since January 15.
The March copper contract settled 0.42% lower on Wednesday to end at USD3.337 a pound. Copper prices were likely to find near-term support at USD3.307 a pound, the low from January 15 and resistance at USD3.355 a pound, the high from January 22.
Earlier in the day, data showed that the preliminary reading of China's HSBC manufacturing purchasing managers' index fell to a six-month low of 49.6 in January from a final reading of 50.5 in the previous month. Analysts had expected the index to tick up to 50.6.
Copper traders consider shifts in the HSBC PMI an indicator of China's copper demand, as the industrial metal is widely used by the sector.
Data released earlier in the week showed that China's economy expanded at an annual rate of 7.7% in the fourth quarter, slowing down from 7.8% in the three months to September.
The Asian nation is the world's largest copper consumer, accounting for almost 40% of world consumption last year.
Investors looked ahead to key U.S. economic data later in the day for further indications on the strength of the economy and the future course of monetary policy. The U.S. is to release the weekly report on initial jobless claims later in the day as well as a private sector report on existing home sales.
Elsewhere on the Comex, gold for February delivery was flat to trade at USD1,238.70 a troy ounce, while silver for March delivery dipped 0.1% to trade at USD19.81 a troy ounce.
Gold and silver prices were under pressure amid speculation the Federal Reserve will make a further reduction in monetary stimulus at its policy meeting next week.