Copper futures drop to 1-week low on global growth fears
Investing.com
Published Sep 05, 2011 06:40AM ET
On the Comex division of the New York Mercantile Exchange, copper futures for December delivery traded at USD4.076 a pound during European morning trade, dropping 0.94%.
It earlier fell as much as 1.05% to trade at USD4.071 a pound, the lowest price since August 29.
Concerns that the global economic recovery is losing momentum were underlined on Friday, after a government report showed that the U.S. economy added zero jobs in August, the weakest reading since September 2010.
Economists had expected non-farm payrolls to rise by 74,000 last month. The unemployment rate remained unchanged at 9.1%.
Adding to global worries, German Chancellor Angela Merkel's ruling party was defeated in local elections on Sunday, exacerbating fears over the region’s ongoing sovereign debt crisis.
The dire global outlook prompted investors to shun riskier assets, such as stocks and commodities and flock to traditional safe haven assets like the greenback.
The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, was up 0.4% to hit 75.12, after rising earlier to 75.16, the highest since August 11.
Commodity prices typically weaken when the greenback strengthens as the dollar-priced commodity becomes more expensive for holders of other currencies.
Copper prices found support as Freeport McMoran Copper & Gold’s Peruvian copper miners planned to launch a 48-hour strike starting September 7, a union official said over the weekend.
Meanwhile, Freeport’s Indonesia mine workers have threatened to strike on September 15. Freeport is the world’s second largest copper producer, behind Codelco, Chile’s state-owned copper miner.
Elsewhere on the Comex, gold for October delivery climbed 0.8% to trade at USD1,889.25 a troy ounce, while silver for December delivery shed 0.64% to trade at USD42.79 a troy ounce.
COMEX floor trading will be closed on Monday for the U.S. Labor Day holiday.
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Written By: Investing.com
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