Copper is traded near six year lows

06.08.2015

On Thursday, copper prices are traded near six-year low reached earlier in the week, as the dollar got stronger and markedly suppressed demand for the red metal.

During European morning trade, on the Comex division of the New York Mercantile Exchange, copper futures for September delivery rose 0.3 cents, or 0.14%, to get traded at $ 2352 per pound.

A day earlier, copper fell 1.3 cents, or 0.57%, to a price of $ 2348. Copper has fallen to a six-year low of $ 2321 after disappointing data on manufacturing activity in China.

The Asian country is the world's largest consumer of copper, with its share of almost 40% of world consumption last year.

The USD index, which tracks the US currency against a basket of six major rivals, was traded on Thursday morning at 98.07, after a three-month peak of 98.33 the previous session.

A stronger dollar usually suppresses the demand for raw materials as an alternative investment and increases in the price of dollar-denominated goods for holders of other currencies.

The US currency has strengthened recently on expectations that the improving US economy will push the Federal Reserve to raise interest rates in September.

Data on Wednesday showed that activity in the US service sector grew in July at the fastest pace since August 2005. The Institute for Supply Management reported that the PMI in non-manufacturing sector rose to 60.3 last month, from 56.0 in June, much higher than the anticipated 56.2.

The data came after ADP reported that the number of people employed in the private sector rose by 185 000 last month, below the expected increase of 215 000.

Market participants are preparing for Friday publication of US government's report on non-farm payrolls. According to the consensus forecast, the report will show an increase in the number of jobs for last month at 215 000. The monthly growth at above 200 000 is considered by economists as a high rate.

Gold futures for December delivery dropped $ 1.40, or 0.13%, to get traded at $ 1084.20 per troy ounce, while silver futures for September delivery fell 2.8 cents, or 0.19%, to $ 14.52 price per ounce.

In recent weeks, gold has come under strong selling pressure amid speculation that in the coming months, the Federal Reserve will raise interest rates for the first time since 2006.

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