INV: Copper futures fall on profit-taking, Fed uncertainty
Investing.com - Copper futures were lower on Wednesday, as ongoing uncertainty over the timing of the Federal Reserve’s widely expected reduction in monthly bond purchases prompted investors to take profit on recent gains.
On the Comex division of the New York Mercantile Exchange, copper futures for December delivery traded at USD3.271 a pound during European morning trade, down 1%.
Copper prices traded in a range between USD3.263 a pound, the daily low and a session high of USD3.314 a pound. The December contract settled 2.2% higher at USD3.304 a pound on Tuesday.
Copper prices were likely to find support at USD3.245 a pound, the low from September 2 and resistance at USD3.323 a pound, the high from August 29.
Copper futures rallied sharply on Tuesday after a series of upbeat manufacturing reports out of the U.S., China and Europe fuelled optimism over the global economy.
Copper is sensitive to the economic outlook because of its widespread uses in construction and manufacturing.
Market players now looked ahead to key macroeconomic data later this week that will determine when the U.S. will begin withdrawing its stimulus measures.
The U.S. will release a closely watched report on U.S. nonfarm payrolls on Friday amid ongoing speculation over when the Federal Reserve will start to taper its USD85 billion-a-month bond-buying program.
Traders 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.
Any improvement in the U.S. economy was likely to reinforce the view that the central bank will begin to taper its bond purchase program in the near-term.
The central bank is scheduled to meet September 17-18 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 0.55% to trade at USD1,404.40 a troy ounce, while silver for December delivery tumbled 2.05% to trade at USD23.92.
