Copper prices edged lower Tuesday, weighed down by a drop in the price of oil.
Copper for July delivery closed down 0.1% at $2.5640 a pound on the Comex division of the New York Mercantile Exchange.
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U.S. crude closed down 0.3% at $49.66 a barrel. Swings in oil prices tend to sway copper, as many investors trade the two commodities in a single basket, with a bigger share devoted to oil.
Also weighing on copper prices were comments from China's largest copper smelter that the building of new smelting capacity will allow China to attain self-sufficiency in refined copper in the next few years, according to a Commerzbank note. Jiangxi Copper Co. said that the annual addition of 250,000 tons to China's smelting capacity over the next few years will allow the country to end imports.
Looking ahead, investors were focused on Chinese purchasing managers index data, due out Wednesday. China is the world's largest copper consumer, accounting for some 45% of global demand.
At the same time, copper prices received a boost Tuesday from the weaker dollar. Copper is denominated in the U.S. currency and becomes less expensive to foreign investors when the dollar declines.
Gold for August delivery was down 0.5% at $1,265.70 a troy ounce. Political strife in the U.S. and upcoming elections in the U.K. have stoked demand for the safe haven metal, pushing prices to a nearly one-month high last week.
"There remains sufficient nervousness in the financial markets to suggest that gold should be bought on dips," said Peter Hug, global trading director at Kitco Metals, in a note to clients.
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(END) Dow Jones Newswires
May 30, 2017 16:52 ET (20:52 GMT)