Investing.com - Copper prices held near the previous session's six-year low on Wednesday, as investors continued to monitor movements on China's volatile stock market.
Copper for September delivery on the Comex division of the New York Mercantile Exchange inched up 0.2 cents, or 0.11%, to trade at $2.289 a pound during morning hours in London.
A day earlier, copper plunged to $2.265, a level not seen since July 2009, before ending at $2.287, down 3.4 cents, or 1.46%, as steep declines on Chinese stock markets dampened appetite for the red metal.
The Shanghai Composite took investors on another volatile ride on Wednesday, tumbling by as much as 5% after the open, before paring losses after the midday break to finally end up 1.2% as bargain buyers swooped in to take advantage of cheap valuations.
Chinese stock markets slumped 6% a day earlier amid growing concerns over the health of the Asian nation's economy and worries that policymakers may allow the yuan to continue to depreciate, fueling fears over a currency war that could destabilize the global economy.
Market players are also concerned that the plunge in the stock market could spread to other parts of the Chinese economy, triggering fears that the Asian nation's demand for the industrial metal will decline.
China is the world’s largest copper consumer, accounting for almost 40% of world consumption last year.
Elsewhere, gold futures for December delivery tacked on $4.90, or 0.44%, to trade at $1,121.80 a troy ounce as investors turned their attention to the release of minutes from the Federal Reserve's latest policy meeting later in the session for further hints on the timing of a U.S. rate hike.
Traders are also awaiting U.S. inflation data due later in the day. The Commerce Department is expected to report at 8:30AM ET that consumer prices rose by 0.2% in July, after increasing 0.3% in June. Core inflation is forecast to gain 0.2%, after rising 0.2% a month earlier.
Data on Tuesday showed that U.S. housing starts rose to an almost eight-year high in July, supporting the case for higher interest rates.
Despite the recent batch of upbeat U.S. economic data, some traders believe the Fed could postpone raising interest rates next month as officials are likely to remain concerned over global growth and inflation pressures due to China’s shock currency devaluation move and weak commodity prices.
The US dollar index, which tracks the greenback against a basket of six major rivals, was at 96.79 early Wednesday, down 0.2% for the day.