Metals: Copper Drops As China Data Disappoints
Copper prices fell Tuesday, as economic data in China proved disappointing and led to fears that a key area of copper consumption may be slowing down.
Copper for July delivery was recently down 1% at $2.6340 a pound on the Comex division of the New York Mercantile Exchange.
China's factory activity fell to a seven-month low in April, according to Tuesday data. The Caixin manufacturing purchasing managers index declined from 50.3 in April from 51.2 in March, which still indicated expansion but at a slower pace. Last month, official PMI numbers showed manufacturing activity fell to 51.2 in April, compared with 51.7 in March.
"These key early indicators thus point to an economic slowdown in the next few months. Consequently, market participants who for the most part were betting on rising copper prices in expectation of further economic stimulus measures in China and the U..S are likely to be disappointed," said Commerzbank analysts Tuesday.
China is the world's largest copper consumer, so the metal tends to track signs of economic activity within the country.
Gold for June delivery was flat at $1,255.50 a troy ounce in New York, fluctuating between minor gains and losses as traders awaited news out of the Federal Reserve's May policy meeting and more economic data this week. The Federal Open Market Committee meeting is scheduled to start Tuesday and end Wednesday.
In Europe, investors are increasingly emboldened by strong polling for Emmanuel Macron -- the pro-European Union centrist candidate -- ahead of Sunday's French presidential election second round.
"Emmanuel Macron's victory in the first round of the French presidential election led to profit-taking by investors in precious metals, with the result bringing more certainty to the market, given Macron's more pro-EU stance," ING wrote in a Tuesday report.
Write to Stephanie Yang at stephanie.yang@wsj.com
Copper prices fell Tuesday, as economic data in China proved disappointing and led to fears that a key area of copper consumption may be slowing down.
Copper for July delivery settled down 1% at $2.6355 a pound on the Comex division of the New York Mercantile Exchange.
China's factory activity fell to a seven-month low in April, according to Tuesday data. The Caixin manufacturing purchasing managers index declined from 50.3 in April from 51.2 in March, which still indicated expansion but at a slower pace. Last month, official PMI numbers showed manufacturing activity fell to 51.2 in April, compared with 51.7 in March.
"These key early indicators thus point to an economic slowdown in the next few months. Consequently, market participants who for the most part were betting on rising copper prices in expectation of further economic stimulus measures in China and the U..S are likely to be disappointed," said Commerzbank analysts Tuesday.
China is the world's largest copper consumer, so the metal tends to track signs of economic activity within the country.
Gold for June delivery closed up 0.1% at $1,257.00 a troy ounce in New York, fluctuating between minor gains and losses as traders awaited news out of the Federal Reserve's May policy meeting and more economic data this week. The Federal Open Market Committee meeting is scheduled to start Tuesday and end Wednesday.
In Europe, investors are increasingly emboldened by strong polling for Emmanuel Macron -- the pro-European Union centrist candidate -- ahead of Sunday's French presidential election second round.
"Emmanuel Macron's victory in the first round of the French presidential election led to profit-taking by investors in precious metals, with the result bringing more certainty to the market, given Macron's more pro-EU stance," ING wrote in a Tuesday report.
Write to Stephanie Yang at stephanie.yang@wsj.com
(END) Dow Jones Newswires
May 02, 2017 14:52 ET (18:52 GMT)