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Copper futures fall to 1-week low on Fed taper concerns

Published 09/24/2013, 05:34 AM
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Investing.com - Copper futures were lower for the third consecutive day on Tuesday, amid concerns over how long the U.S. central bankers will maintain the pace of its asset purchases.

On the Comex division of the New York Mercantile Exchange, copper futures for December delivery traded at USD3.266 a pound during European morning trade, down 1%.

Copper prices fell by as much as 1.15% earlier in the day to hit a session low of USD3.261 a pound, the weakest level since September 18. The December contract settled 0.65% lower at USD3.298 a pound on Monday.

Copper prices were likely to find support at USD3.206 a pound, the low from September 18 and resistance at USD3.309 a pound, the high from September 23.

Appetite for growth-linked assets weakened after New York Federal Reserve President William Dudley said Monday that the pace of the U.S. economic recovery remains insufficient for the central bank to start scaling back its stimulus program.

Dudley said that adjustments to the Fed’s USD85 billion-a-month asset purchase program "need to be anchored in an assessment of how the economy is actually performing”.

The Fed said last week that it wanted to see more evidence of a sustained economic recovery before it adjusted the scale of its bond buying program. The decision surprised markets, which had been expecting a modest reduction to the bank’s stimulus program.

The central bank’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 0.75% to trade at USD1,316.80 a troy ounce, while silver for December delivery dropped 1.55% to trade at USD21.51 a troy ounce.

Moves in the gold and silver price this year have largely tracked shifting expectations as to whether the U.S. central bank would end its quantitative easing program sooner-than-expected.

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