Copper futures rise in choppy trade with China in focus
Investing.com - Copper futures rose in choppy trade on Monday, as investors continued to monitor wild swings in China's equity markets.
Copper for September delivery on the Comex division of the New York Mercantile Exchange hit an intraday low of $2.307 a pound before turning higher to trade at $2.351 during morning hours in London, up 3.9 cents, or 1.67%. U.S. markets will be closed on Monday for the Labor Day holiday.
Meanwhile, Chinese stock markets reopened on Monday after being closed on Thursday and Friday for the World War Two Victory Day parade.
The Shanghai Composite took investors on another roller coaster ride, rising almost 2% after the open, only to turn negative after the midday break to end down 2.5%.
Copper prices have been under heavy selling pressure in recent weeks as fears of a China-led global economic slowdown spooked traders and rattled sentiment.
Prices of the red metal sank to a six-year low of $2.202 on August 24 as concerns over the health of China's economy and steep declines on Chinese stock markets dampened appetite for the red metal.
The turmoil in markets began when China unexpectedly devalued the yuan on August 11, sparking fears that the economy may be slowing at a faster than expected rate.
China's National Bureau of Statistics on Monday said it has revised down the 2014 GDP growth rate to 7.3% from the previously announced 7.4%. For this year, China has set a growth target of about 7%, the slowest pace in 25 years.
The Asian nation is the world's largest copper consumer, accounting for almost 40% of world consumption last year.
On Friday, prices of the red metal tumbled 7.2 cents, or 3.04%, as global stock markets dropped after a mixed August jobs report failed to allay uncertainty about whether the Federal Reserve will increase interest rates later this month.
The Labor Department reported that the U.S. economy added 173,000 jobs last month, below forecasts for an increase of 220,000 and slowing from gains of 245,000 a month earlier.
However, the unemployment rate dropped from 5.3% to 5.1%, better than expectations for 5.2% and the lowest since April 2008.
Hourly earnings, a component of the jobs report that the Federal Reserve has said must rise, ticked up 0.3%, above forecasts for a 0.2% increase and following a gain of 0.2% in the previous month.
The jobs report failed to provide much clarity on when the Federal Reserve will decide to raise short term interest rates. The timing of a Fed rate hike has been a constant source of debate in the markets in recent months.
Elsewhere, gold futures for December delivery inched up 40 cents, or 0.04%, to trade at $1,121.80 a troy ounce, while silver tacked on 3.1 cents, or 0.21%, to $14.57.
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.
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