Copper futures edge lower after euro zone, China PMIs

Investing.com - Copper futures edged lower on Monday, as investors digesting a mixed round of manufacturing data from the euro zone and China.

China and the euro zone are major global copper consumers and manufacturing numbers are often used as indicators for future copper demand growth.
 
On the Comex division of the New York Mercantile Exchange, copper futures for March delivery traded at USD3.193 a pound during European morning trade, down 0.4%.

Comex copper prices traded in a range between USD3.188 a pound, the daily low and a session high of USD3.215 a pound.

The March contract settled 0.45% higher on Friday to end at USD3.205 a pound.

Copper prices were likely to find support at USD3.180 a pound, the low from November 27 and resistance at USD3.225 a pound, the high from November 29.

In the euro zone, data on Monday showed that the bloc’s manufacturing PMI rose to a two year high of 51.6 last month from October's 51.3, slightly higher than a preliminary estimate of 51.5.

However, Spain’s manufacturing sector contracted for the first time since July last month, while the French manufacturing sector contracted for the 21st straight month.

The Spanish PMI fell to 48.6 from 50.9 in October, led lower by weaker orders and output.

The French index fell to 48.4 from 49.1 in October, the lowest level since June.

Meanwhile, in China, data showed that the country’s final HSBC Purchasing Managers Index came in at 50.8 for November, slightly above forecasts for 50.5, and beating the flash estimate of 50.4, but was still slightly lower than October's final reading of 50.9.

The data was published one day after a government report showed that China’s manufacturing purchasing managers' index held steady at an 18-month high of 51.4 in November, compared to forecasts for a decline to 51.1.

Investors now looked ahead to key U.S. economic data later in the week to further gauge the strength of the economy and the need for stimulus.

The Institute of Supply Management was to release its manufacturing PMI later in the day. Market players are also focusing on Thursday’s third quarter gross domestic product report as well as Friday’s November nonfarm payrolls report.

The Federal Reserve, which holds its next meeting on December 17-18, has said the timing of its tapering depends on the health of the labor and housing markets.

Prices of the industrial metal are down approximately 13% this year on concerns the Fed would begin cutting back its easy-money policy by trimming its USD85-billion monthly bond purchasing program.

The U.S. 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 February delivery dropped 1.05% to trade at USD1,237.30 a troy ounce, while silver for March delivery tumbled 1.65% to trade at USD19.70 a troy ounce.