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Copper falls to 7-week low before turning higher in cautious trade

Published 08/12/2014, 04:41 AM
Copper turns higher after hitting 7-week low with China data in focus
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Investing.com - Copper futures fell to a seven-week low before turning higher on Tuesday, as investors were cautious ahead of key economic data out of China, while geopolitical developments in Ukraine, Iraq and Gaza remained in focus.

On the Comex division of the New York Mercantile Exchange, copper for September delivery tacked on 0.28%, or 0.9 cents, to trade at $3.183 a pound during European morning hours.

Prices fell to a daily low of $3.155 a pound earlier, the weakest level since June 26. A day earlier, copper futures rose 0.03%, or 0.1 cents, to settle at $3.174 a pound.

Futures were likely to find support at $3.150, the low from June 26 and resistance at $3.247, the high from August 11.

Chinese industrial production, retail sales and urban investment figures for the month of July are all due for release on Wednesday.

Data over the weekend showed that consumer price inflation in China held steady at 2.3% in July, in line with expectations.

Copper prices have been on a downward trend in recent sessions amid indications of a slowdown in demand from China, the world’s largest consumer of the red metal.

Official trade data released August 8 showed that China’s copper arrivals fell 2.9% month-on-month in July, declining for a third straight month.

Elsewhere on the Comex, gold for December delivery tacked on 0.14%, or $1.80, to trade at $1,312.30 a troy ounce, while silver for September delivery shed 0.08%, or 1.7 cents, to trade at $20.07 an ounce.

Market players continued to monitor geopolitical developments from Ukraine and the Middle East.

In Ukraine, a Russian convoy of 280 trucks carrying humanitarian aid set off on Tuesday amid Western warnings against using help as a pretext for an invasion.

Ukraine has claimed that 45,000 Russian troops have amassed on its border, while NATO warned that there was a "high probability" Moscow would intervene militarily in the country's east, where government forces are closing in on pro-Russia separatists.

Meanwhile, in Iraq, Haidar al-Abadi, the deputy speaker of parliament, was named as the new prime minister on Monday in place of Nuri al-Maliki, but Maliki has refused to step down and deployed special forces in Baghdad.

Maliki said the decision was a "dangerous violation" of the constitution and vowed to "fix the mistake".

U.S. President Barack Obama said the naming of Abadi was an important step for Iraq towards rebuffing Islamic State militants.

The U.S. recently began air strikes targeting jihadi militants from the Islamic State insurgent group in the northern part of the country in an effort to protect Iraqi civilians from the uprising as well as U.S. personnel in the country.

Elsewhere, a 72-hour ceasefire which began late on Sunday evening between Israel and Hamas in Gaza held for a second day, following a month of violence in the Hamas-ruled territory.

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