Investing.com - Copper prices declined for the second consecutive session on Wednesday, as investors looked ahead to the start of China’s National People’s Congress annual meeting on Thursday.
The Asian nation 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 for May delivery slumped 1.7 cents, or 0.64%, to trade at $2.640 a pound during European morning hours.
Futures were likely to find support at $2.616, the low from February 25, and resistance at $2.695, the high from March 3.
A day earlier, copper lost 4.1 cents, or 1.52%, to settle at $2.656 a pound, as concerns over the health of China's economy and a broadly stronger U.S. dollar dampened the appeal of the red metal.
The latest meeting of the legislature, the second to be overseen by President Xi Jinping and Premier Li Keqiang, comes amid lingering concerns over the health of the country’s economy.
Analysts expect Premier Li to lower China’s economic growth target for 2015 to 7.0% from its level of “around 7.5%” for last year and that further stimulus measures will be announced as deflation risks rise.
The Asian nation is the world’s largest copper consumer, accounting for almost 40% of world consumption last year.
Elsewhere on the Comex, gold futures for April delivery shed $2.40, or 0.2%, to trade at $1,202.00 a troy ounce, while silver futures for May delivery dipped 6.6 cents, or 0.41% to trade at $16.23 an ounce.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was up 0.25% to 95.69 early on Wednesday, the most since January 26.
The greenback remained supported amid expectations for higher interest rates in the U.S.
Meanwhile, the euro was likely to remain under pressure as investors turned their attention to the upcoming European Central Bank meeting on Thursday, when it was expected to announce details of its quantitative easing program.
Traders also looked ahead to the release of the latest U.S. nonfarm payrolls report on Friday, for further indications on the strength of the recovery in the labor market.
Market analysts expect the data to show that the U.S. economy added 240,000 jobs in February, slowing from a gain of 257,000 in January, while the unemployment rate was forecast to decline to 5.6% from 5.7%.
A strong U.S. nonfarm payrolls report was likely to add to speculation over when the Federal Reserve will begin to raise interest rates, while a weak number could boost gold by undermining the argument for an early rate hike.
Expectations of higher borrowing rates going forward is considered bearish for gold, as the precious metal struggles to compete with yield-bearing assets when rates are on the rise.