IV:Copper futures retreat from 5-week high ahead of China PMI data
Investing.com - Copper futures retreated from the previous session’s five-week high on Wednesday, as investors looked ahead to manufacturing data out of China, set for release on Thursday.
China is the world’s largest copper consumer, accounting for almost 40% of world consumption last year.
On the Comex division of the New York Mercantile Exchange, copper futures for December delivery traded at USD3.307 a pound during European morning trade, down 0.85%.
Copper prices fell to a session low of USD3.301 a pound earlier.
The December contract rose to USD3.355 a pound on Tuesday, the strongest level since September 20, before settling at USD3.335 a pound, up 0.97%.
Copper prices were likely to find support at USD3.282 a pound, the low from October 21 and resistance at USD3.355 a pound, the high from October 22.
HSBC will release its flash Purchasing Managers' Index for October on Thursday. Last month, the final HSBC PMI reading came in at 50.2.
Traders consider shifts in the country’s PMI an indicator of China's copper demand, as the industrial metal is widely used by the sector.
Copper prices rallied on Tuesday as the U.S. dollar weakened after disappointing U.S. payrolls data fuelled speculation that the Federal Reserve will delay plans to start reducing stimulus.
The Department of Labor said that the U.S. economy added 148,000 jobs in September, well below expectations for an increase of 180,000.
The unemployment rate ticked down to a four-and-a-half year low of 7.2% from 7.3% in August, but this was partially due to more people dropping out of the labor force.
The weaker-than-expected data bolstered expectations that the Fed would postpone plans to start scaling back its asset purchase program well into next year.
The central bank is scheduled to meet October 29-30 to review the economy and assess policy.
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 fell 0.8% to trade at USD1,332.00 a troy ounce, while silver for December delivery dropped 0.9% to trade at USD22.59 a troy ounce.
