IV:Copper futures seesaw with China PMI, U.S. jobs data in focus
Investing.com - Copper futures fluctuated between small gains and losses on Monday, as investors digested conflicting data out of China and the U.S., the world’s two biggest consumers of the industrial metal.
On the Comex division of the New York Mercantile Exchange, copper futures for September delivery traded at USD3.170 a pound during European morning trade, down 0.1%.
Nymex copper prices held in between a tight trading range of USD3.149 a pound, the daily low and a session high of USD3.189 a pound.
Copper prices were likely to find support at USD3.102 a pound, the low from August 1 and resistance at USD3.205 a pound, Friday’s high.
China’s HSBC Purchasing Managers' Index for the services industry for July released earlier read 51.3, unchanged from June’s reading.
The official government reading for non-manufacturing PMI in July released over the weekend was 54.1 compared with 53.9 in June.
Readings above 50.0 indicate expansion.
Market players now looked ahead to data scheduled later in the week on China’s trade balance as well as a report on inflation and industrial production, amid ongoing concerns over the Asian nation’s economic outlook.
China is the world’s largest copper consumer, accounting for almost 40% of world consumption last year.
The September contract settled up 0.2% at USD3.172 a pound on Friday after weaker-than-forecast U.S. jobs data dampened expectations that the Federal Reserve will soon start to unwind its asset purchase program.
The Department of Labor said the U.S. economy added 162,000 jobs in July, less than the 184,000 increase forecast by economists. June's figure was revised down to 188,000 from a previously reported gain of 195,000.
The unemployment rate ticked down to 7.4% from 7.6% in June, due in part to more people leaving the labor force.
The U.S. is second behind China in global copper demand.
The data came amid growing uncertainty over the future of the U.S. central bank’s stimulus program, after the Fed said on Wednesday that it would keep buying USD85 billion a month in mortgage and Treasury securities and gave no hint of plans to taper its bond-buying program.
Market players now looked ahead to the Institute for Supply Management's non-manufacturing index later Monday to further gauge the strength of the U.S. economy.
Investors have closely been looking out for U.S. data reports recently to gauge if they will strengthen or weaken the case for the Fed to reduce its bond purchases.
The Fed’s stimulus program is viewed by many investors as a key driver in boosting the price of commodities as it tends to depress the value of the dollar.
Elsewhere on the Comex, gold for December delivery added 0.2% to trade at USD1,312.85 a troy ounce, while silver for September delivery dipped 0.1% to trade at USD19.89 a troy ounce.
Moves in the gold and silver price this year have largely tracked shifting expectations as to whether the U.S. central bank would end its bond-buying program sooner-than-expected.
