Investing.com - Copper futures fluctuated between gains and losses on Wednesday, remaining close to the previous session’s three-month low as sentiment remained fragile amid growing concerns over the global economic outlook.
On the Comex division of the New York Mercantile Exchange, copper futures for May delivery traded at USD3.651 a pound during European morning trade, easing up 0.05%.
The May contract traded between a range of USD3.673, the daily high and a session low of USD3.631, which was the lowest since January 16.
Copper prices tumbled nearly 4% on Tuesday as fears that Spain will be the next country in the euro zone to require a bailout added to the uncertainty over the global economy.
Concerns over Spanish borrowing costs intensified as the yield on the country’s 10-year government bond ticked up to 6.01% on Tuesday, the highest since November.
The increase in yields came as Spain’s Economy Minister Luis de Guindos declined to rule out an international bailout, while Bank of Spain Governor Miguel Angel Fernandez Ordonez said the nation’s lenders may need extra capital if the economy weakens more than expected.
Spanish 10-year yields eased slightly to 5.88% in early trade Wednesday, while Italy’s 10-year government bond yield stood at 5.56%, after rising to as high as 5.73% on Tuesday.
Earlier in the day, Italy’s Treasury auctioned EUR11 billion in short-term bonds, in line with the targeted amount. The country sold EUR3 billion of three-month bonds at an average yield of 1.249%, up from 0.492% at a similar auction last month.
Italy also auctioned EUR8 billion in 12-month bonds at a yield of 2.84%, the highest since December and up sharply from 1.405% last month.
The renewed euro zone debt woes came amid mounting fears over global growth prospects, especially in the U.S. and in China, the world’s two largest economies.
A deeper slowdown in the U.S. and China would impair a global expansion that is already faltering because of the implementation of harsh austerity measures in Europe.
Copper is sensitive to the economic growth outlook because of its widespread uses across industries.
Market players were now looking forward to Friday’s release of Chinese first quarter gross domestic product figures, as well as reports on industrial production and retail sales.
On Tuesday, the Asian nation reported a surprise trade surplus for March, as imports grew just 5.3%, decelerating sharply from February's 39.6% increase.
The trade data came a day after official data showed that consumer price inflation in China accelerated by 3.6% in March, up from 3.2% in February and above expectations for a 3.3% increase.
Investors have been searching for clues in regards to Chinese growth prospects amid fears the country is headed towards a ‘hard landing’. China lowered its GDP growth target for this year to 7.5% last month, the lowest in eight years.
China is the world’s largest copper consumer, accounting for almost 40% of world consumption last year. According to the trade data, China's imports of copper fell 4.6% to 462,182 metric tons in March from 484,569 metric tons the previous month, underling concerns over a slowdown in demand.
Elsewhere on the Comex, gold for June delivery edged 0.35% lower to trade at USD1,654.65 a troy ounce, while silver for May delivery shed 0.45% to trade at USD31.53 a troy ounce.
On the Comex division of the New York Mercantile Exchange, copper futures for May delivery traded at USD3.651 a pound during European morning trade, easing up 0.05%.
The May contract traded between a range of USD3.673, the daily high and a session low of USD3.631, which was the lowest since January 16.
Copper prices tumbled nearly 4% on Tuesday as fears that Spain will be the next country in the euro zone to require a bailout added to the uncertainty over the global economy.
Concerns over Spanish borrowing costs intensified as the yield on the country’s 10-year government bond ticked up to 6.01% on Tuesday, the highest since November.
The increase in yields came as Spain’s Economy Minister Luis de Guindos declined to rule out an international bailout, while Bank of Spain Governor Miguel Angel Fernandez Ordonez said the nation’s lenders may need extra capital if the economy weakens more than expected.
Spanish 10-year yields eased slightly to 5.88% in early trade Wednesday, while Italy’s 10-year government bond yield stood at 5.56%, after rising to as high as 5.73% on Tuesday.
Earlier in the day, Italy’s Treasury auctioned EUR11 billion in short-term bonds, in line with the targeted amount. The country sold EUR3 billion of three-month bonds at an average yield of 1.249%, up from 0.492% at a similar auction last month.
Italy also auctioned EUR8 billion in 12-month bonds at a yield of 2.84%, the highest since December and up sharply from 1.405% last month.
The renewed euro zone debt woes came amid mounting fears over global growth prospects, especially in the U.S. and in China, the world’s two largest economies.
A deeper slowdown in the U.S. and China would impair a global expansion that is already faltering because of the implementation of harsh austerity measures in Europe.
Copper is sensitive to the economic growth outlook because of its widespread uses across industries.
Market players were now looking forward to Friday’s release of Chinese first quarter gross domestic product figures, as well as reports on industrial production and retail sales.
On Tuesday, the Asian nation reported a surprise trade surplus for March, as imports grew just 5.3%, decelerating sharply from February's 39.6% increase.
The trade data came a day after official data showed that consumer price inflation in China accelerated by 3.6% in March, up from 3.2% in February and above expectations for a 3.3% increase.
Investors have been searching for clues in regards to Chinese growth prospects amid fears the country is headed towards a ‘hard landing’. China lowered its GDP growth target for this year to 7.5% last month, the lowest in eight years.
China is the world’s largest copper consumer, accounting for almost 40% of world consumption last year. According to the trade data, China's imports of copper fell 4.6% to 462,182 metric tons in March from 484,569 metric tons the previous month, underling concerns over a slowdown in demand.
Elsewhere on the Comex, gold for June delivery edged 0.35% lower to trade at USD1,654.65 a troy ounce, while silver for May delivery shed 0.45% to trade at USD31.53 a troy ounce.