--Investors eschew bullish bets ahead of the U.S. election
By Tatyana Shumsky
NEW YORK--Copper sank to a two-month low Monday as investors continued to flock to the safety of the dollar amid concerns about Europe and anxiety ahead of the U.S. election.
The most actively traded contract, for December delivery, was recently down 1.95 cents, or 0.6%, at $3.4620 a pound on the Comex division of the New York Mercantile Exchange. The contract traded as low as $3.4485, its lowest intraday price since Sept. 5.
The euro-zone debt crisis was back in focus amid reports that the European Central Bank was reviewing whether its treatment of Spanish bonds as collateral was too generous.
Greece, meanwhile, is due to vote on a fresh round of austerity measures later this week. The spending cuts are a necessary step for Greece to attain the next installment of rescue financing and ensure the euro-zone member does not default on its loans.
"Greece remains up in the air while growth prospects on the continent as a whole remain bleak," said Edward Meir, senior commodity strategist with INTL FCStone.
Investors sought safeguard their wealth from Europe's problems by selling the euro in favor of the dollar, pushing the euro close to a two-month low against the greenback. The euro touched a low of $1.2767, and was recently changing hands at $1.2785, down 0.4% on the day.
As the dollar strengthens, commodities that are traded in dollars become more expensive for investors who use other currencies.
Investors were also apprehensive of putting on bullish positions in copper ahead of the U.S. presidential election. Speculative bets on bullish copper futures and options fell by 61% in the week ended Oct. 30, according to Friday afternoon data from the Commodity Futures Trading Commission.
"With a close election on the cards for tomorrow, one senses that the markets will only get fresh incentives in the wake of the results," Michael Turek, senior director of Newedge's New York Metals Desk, said in an email.
Write to Tatyana Shumsky at tatyana.shumsky@dowjones.com
