Investing.com - Copper prices fell from a two-week high on Monday, as a broadly stronger U.S. dollar reduced the appeal of the red metal, but losses were limited following the release of better than expected Chinese economic data over the weekend.
The dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was up 0.4% to 98.00. A stronger dollar dampens demand for raw materials as an alternative investment and makes dollar-priced commodities more expensive for holders of other currencies.
Meanwhile, in China, the National Bureau of Statistics said Saturday that industrial production rose by an annualized rate of 6.2% in November, the fastest pace in five months.
The Asian nation is the world’s largest copper consumer, accounting for nearly 45% of world consumption.
Copper for March delivery on the Comex division of the New York Mercantile Exchange shed 1.5 cents, or 0.73%, to trade at $2.101 a pound during morning hours in London. Meanwhile, three-month copper on the London Metal Exchange dipped 0.33% to $4663.00 a metric ton.
On Friday, prices rose to $2.138, the most since November 26, amid optimism surrounding recent supply-cut announcements by major mining companies, such as Glencore (L:GLEN), Freeport McMoran (N:FCX) and Anglo American (L:AAL).
The world’s biggest mining companies are reeling from the deepening rout in commodities prices this year.
Copper is on track to post an annual decline of 27% in 2015 as fears of a China-led global economic slowdown spooked traders and rattled sentiment.
Elsewhere in metals trading, gold futures fell sharply on Monday, but still stuck in familiar trading range, as market players prepared for the first U.S. rate hike since 2006 later this week.
The Federal Reserve is widely expected to raise interest rates for the first time in nearly a decade at the conclusion of its two day policy meeting at 2:00PM ET on Wednesday. The central bank will also release its latest forecasts for economic growth and interest rates.
Fed Chair Janet Yellen is to hold what will be a closely-watched press conference 30 minutes after the release of the Fed's statement, as investors look for signals about the path of future rate hikes.
Many in the market anticipate the pace of increases to be gradual amid concerns over tepid growth overseas and divergent monetary policies between the U.S. and other nations.