Copper futures tumble after China GDP disappoints
Investing.com
Published Oct 18, 2011 06:39AM ET
On the Comex division of the New York Mercantile Exchange, copper futures for December delivery traded at USD3.301 a pound during European morning trade, tumbling 2.28%.
It earlier fell by as much as 2.9% to trade at USD3.272 a pound, the lowest price since October 12.
Earlier in the day, official data showed that China’s economy expanded at a rate of 9.1% in the third quarter of 2011, below forecasts of 9.2% and slowing from growth of 9.5% in the preceding quarter.
It was the slowest rate of growth since the second quarter of 2009, fuelling concerns over a slowdown in demand from the world’s largest copper consumer.
Adding to concerns over the global economy, ratings agency Moody's put France on three months notice that "pressure from weaker debt metrics," could leave the country with a negative credit outlook and may even result in a downgrade.
Meanwhile, comments from German Finance Minister Wolfgang Schaeuble on Monday continued to weigh on sentiment after saying that the upcoming European Union summit on October 23 would not yield a “definitive solution” to the region’s debt crisis.
Investors reduced their exposure to riskier, growth-related assets such as stocks and commodities, and flock to traditional safe haven assets like the U.S. dollar.
The dollar index, which tracks the performance of the greenback against a basket of six other major currencies, was up 0.2% to trade at 77.69.
A stronger dollar weighs on demand for raw materials as an alternative investment and makes dollar-priced commodities more expensive for holders of other currencies.
Swiss lender UBS said in a report earlier that while it expects copper prices to rise in the current quarter, October “could be weaker due to a lack of macro direction.”
Elsewhere on the Comex, gold for December delivery dropped 1.06% to trade at USD1,658.85 a troy ounce, while silver for December delivery plunged 2.44% to trade at a seven-day low of USD31.04 a troy ounce.
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Written By: Investing.com
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