IV:Copper futures reapproach 3-year low as Fed tapering fears weigh
Investing.com - Copper futures were down sharply on Wednesday, reapproaching the previous session’s three-year low after a series of upbeat U.S. data releases on Tuesday reinforced the view that Federal Reserve will begin to taper its bond purchase program in the coming months.
On the Comex division of the New York Mercantile Exchange, copper futures for September delivery traded at USD3.037 a pound during European morning trade, down 1.3% on the day.
New York-traded copper prices fell by as much as 1.8% earlier in the session to hit a daily low of USD3.020 a pound.
Comex copper prices fell to USD2.985 a pound on Tuesday, the weakest level since July 20, 2010, amid growing fears over a cash crunch in the Chinese financial system.
China is the world’s largest copper consumer, accounting for almost 40% of world consumption last year.
Meanwhile, concerns the Fed could taper down its bond purchases amid increasing signs of a recovery in the U.S. economy also weighed.
U.S. consumer confidence rose to highest level since January 2008 in the current month, data on Tuesday showed, while another report showed that U.S. new home sales rose to an almost five year high May.
A separate report showed that U.S. durable goods orders rose unexpectedly in May.
Fed Chairman Ben Bernanke said last week that the central bank could begin tapering asset purchases by the end of this year if the economy continues to pick up.
Later in the day, the U.S. Commerce Department is scheduled to release the third estimate of gross domestic product for the first quarter.
Prices of the industrial metal have been under heavy selling pressure in recent sessions as a combination of concerns over a deepening slowdown in China and fears over an end to the Federal Reserve’s asset purchase program weighed.
Elsewhere on the Comex, gold for August delivery tumbled 3.3% to trade at USD1,232.25 a troy ounce, the weakest level since September 2010.
Meanwhile, silver for September delivery plunged 5% to trade at USD18.58 a troy ounce, the lowest since August 2010.
Moves in the gold and silver prices this year have largely tracked shifting expectations as to whether the U.S. central bank would end its bond-buying program sooner-than-expected.
