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Copper teeters near 6-year lows on weak demand outlook

Published 2015-11-18, 03:08 a/m
© Reuters.  Copper prices struggle near 6-year lows
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Investing.com - Copper prices held near the lowest level since May 2009 on Wednesday, as ongoing concerns over slackening demand for the industrial metal weighed.

Copper for December delivery on the Comex division of the New York Mercantile Exchange shed 1.2 cents, or 0.59%, to trade at $2.091 a pound during morning hours in London. It earlier fell to $2.067, close to levels not seen in more than six years.

Meanwhile, three-month copper on the London Metal Exchange dipped 0.34% to $4,656.75 a metric ton, hovering near the lowest level since June 2009.

Copper prices have declined for 13 straight days as the possibility of higher interest rates in the U.S. and slower global economic growth, particularly in China, weighed.

Prices of the red metal are down almost 30% since May as fears of a China-led global economic slowdown spooked traders and rattled sentiment.

The Asian nation is the world’s largest copper consumer, accounting for nearly 45% of world consumption.

Elsewhere in metals trading, gold prices struggled near six-year lows on Wednesday, as investors braced for a hike in interest rates by the Federal Reserve next month.

Gold futures are nearly 10% lower from highs hit in mid-October as investors recalibrated their expectations of U.S. monetary policy in response to hawkish signals from the Fed.

Expectations of higher borrowing rates going forward is considered bearish for gold, as the precious metal struggles to compete with yield-bearing assets when rates are on the rise.

The U.S. dollar rose to fresh seven-month highs against a basket of six other major currencies amid growing expectations for tighter monetary policy in the U.S. in the coming months.

Dollar-priced commodities become more expensive to investors holding other currencies when the greenback gains.

Investors will be focusing on minutes of the October Federal Reserve meeting due on Wednesday at 2:00PM ET.

The Fed left interest rates unchanged following its meeting last month, as widely expected, but surprised the market with a hawkish statement, which included a direct reference to its next policy meeting.

Recent comments by Fed officials, including Janet Yellen, have bolstered expectations the U.S. central bank will raise interest rates for the first time in nearly a decade when it meets next month.

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