Investing.com - Copper prices were sharply lower on Thursday, as monetary stimulus from the People's Bank of China failed to lift sentiment amid uncertainty over Greece.
On the Comex division of the New York Mercantile Exchange, copper for March delivery fell by as much as 5.4 cents, or 2.08%, to hit a session low of $2.537 a pound, before trading at $2.544 during European morning hours, down 4.7 cents, or 1.81%.
Futures were likely to find support at the $2.496, the low from February 3, and resistance at $2.618, the high from February 4.
The European Central Bank said Wednesday it would no longer accept Greek bonds as collateral for lending, shifting the burden on to Greece’s central bank provide additional liquidity for its lenders and increasing pressure on Athens.
The announcement came after Greece's new finance minister Yanis Varoufakis said the ECB would do "whatever it takes" to support member states such as Greece following a meeting with ECB President Mario Draghi.
Greece’s government is seeking debt relief on its current €240 billion bailout, which has fuelled fears over a clash with its creditors that could bring about its eventual exit from the euro zone.
Athens main stock index sank almost 10% on Thursday, while the yield on Greek 10-Year bonds rose sharply to hover just below the 11%-level.
A day earlier, copper tacked on 0.9 cents, or 0.37%, to settle at $2.591 a pound after China's central bank lowered the amount of deposits banks are required to hold as reserves to 19.5% from 20.0%, in an effort to boost lending and spur economic activity.
The Asian nation is the world’s largest copper consumer, accounting for almost 40% of world consumption.
Copper prices lost 33.1 cents, or 11.72%, in January as concerns over the global economic outlook and the impact on future demand prospects dampened the appeal of the commodity.
Elsewhere on the Comex, gold futures for April inched up $2.20, or 0.17%, to trade at $1,266.70 a troy ounce, while silver futures for March delivery dipped 9.2 cents, or 0.53% to trade at $17.30 an ounce.
On the data front, the U.S. was to produce its weekly report on initial jobless claims in addition to data on the trade balance.
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 234,000 jobs in January, slowing from a gain of 252,000 in December, while the unemployment rate was forecast to hold steady at 5.6%.
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.