Copper tumbles to 6-year low amid China stock market melt-down
Investing.com - Copper prices tumbled to the lowest level in more than six years on Tuesday, as steep declines on Chinese stock markets dampened appetite for the red metal.
Copper for September delivery on the Comex division of the New York Mercantile Exchange sank to an intraday low of $2.281 a pound, a level not seen since July 2009, before trading at $2.287 during morning hours in London, down 3.4 cents, or 1.45%.
The Shanghai Composite tumbled 6% in volatile trade on Tuesday, with losses accelerating towards the end of the session despite fresh efforts by the government to calm the market.
China's central bank injected the largest amount of cash into the financial system on a single-day basis in almost 19 months in an effort to offset outflows in the wake of a weaker yuan.
Market players are concerned that the plunge in the stock market could spread to other parts of the Chinese economy, triggering fears that the Asian nation's demand for the industrial metal will decline.
China is the world's largest copper consumer, accounting for almost 40% of world consumption last year.
A day earlier, copper lost 3.0 cents, or 1.3%, to end at $2.321 as lingering concerns over the health of China's economy drove down prices.
Elsewhere, gold futures for December delivery shed 80 cents, or 0.07%, to trade at $1,117.60 a troy ounce as investors looked ahead to reports on the U.S housing sector later in the day for fresh cues ahead of Wednesday's Federal Reserve minutes.
Some traders believe the Fed could postpone raising interest rates as soon as September as officials are likely to remain concerned over global growth and inflation pressures due to China's currency devaluation move and weak oil prices.
Data on Monday showed that manufacturing activity in the New York region slumped to its lowest level since November 2009 this month as new orders fell sharply.
This was offset by another report showing that U.S. house builder sentiment rose to its highest level in nearly a decade this month.
Gold fell to a five-and-a-half year low of $1,072.30 on July 24 amid speculation the Fed will raise interest rates in September for the first time since 2006. But prices have since rebounded approximately 4.5% on hopes of a delayed U.S. rate hike.
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