FX:Copper edges higher, U.S. fiscal cliff, Greece debt woes weigh
Forexpros - Copper futures inched up during European morning trade on Wednesday, but gains were capped amid ongoing uncertainty surrounding Greece’s bailout plan and mounting fears over the looming fiscal crisis in the U.S.
Investors also eyed the conclusion of the Chinese Communist Party Congress later in the day, where a once-in-a-decade leadership change is to take place.
On the Comex division of the New York Mercantile Exchange, copper futures for December delivery traded at USD3.483 a pound during European morning trade, up 0.35% on the day.
Prices held in a tight trading range between USD3.463 a pound, the daily low and a session high of USD3.490 a pound. New York-traded copper prices slumped to USD3.403 a pound on November 9, the cheapest level since August 21.
Concerns over Greece’s fiscal woes remained after a meeting of euro zone finance ministers earlier in the week ended without any final decision on whether to release an urgently needed EUR31.5 billion bailout installment for the debt-strapped country.
The decision instead has been postponed until November 20th, as the International Monetary Fund and European officials were unable to reach an agreement on how best to reduce Greece’s debt to manageable levels.
Investors also remained concerned over the looming “fiscal cliff” in the U.S., approximately USD600 billion in automatic tax hikes and spending cuts due to come into effect on January 1.
There are fears the U.S. economy will fall back into a recession, unless a divided Congress and the White House can work out a compromise before then.
Meanwhile, copper traders awaited the outcome of the Communist Party’s National Congress.
China’s Vice President Xi Jinping and Vice Premier Li Keqiang were elected to the Communist Party’s central committee earlier Wednesday, while members of the Politburo Standing Committee, the top decision-making body, will be named Thursday.
The Asian nation is the world’s largest copper consumer, accounting for almost 40% of world consumption last year.
Elsewhere on the Comex, gold for December delivery eased up 0.1% to trade at USD1,726.15 a troy ounce, while silver for December delivery added 0.25% to trade at USD32.56 a troy ounce.
