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Copper futures bounce off 7-day low on hopes for China stimulus

Published 20/10/2015, 08:55
Copper turns higher after hitting 7-day low on China stimulus hopes
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Investing.com - Copper futures turned higher after hitting a more than one-week low earlier in the session on Tuesday, as weak China economic growth data reinforced views that Beijing will roll out fresh support measures soon for the world's second largest economy.

Copper for December delivery on the Comex division of the New York Mercantile Exchange hit an intraday low of $2.351 a pound, the weakest level since September 9, before bouncing back to trade at $2.380 during morning hours in London, up 1.3 cents, or 0.54%. A day earlier, copper lost 3.6 cents, or 1.5%.

Chinese government data on Monday showed third-quarter economic growth slowed to 6.9%, the first time since the global financial crisis that the country’s gross domestic product has grown less than 7%.

A separate report showed that industrial production rose by an annualized rate of 5.7% in September, below expectations for a 6.0% increase and following a gain of 6.1% in the preceding month.

Data on fixed asset investment also missed forecasts, reinforcing views that Beijing will roll out further support measures soon for the world's second largest economy.

The Asian nation is the world’s largest copper consumer, accounting for almost 40% of world consumption.

Elsewhere in metals trading, gold futures for December delivery inched up 90 cents, or 0.08%, to trade at $1,173.70 an ounce, as investors looked ahead to reports on the U.S housing sector later in the day for further clues on the strength of the economy and the future path of interest rates.

The Commerce Department is expected to report at 8:30AM Eastern Time Tuesday that housing starts rose 1.2% in September to 1.140 million, while building permits are forecast to drop 0.9% to 1.160 million.

The timing of a Fed rate hike has been a constant source of debate in the markets in recent months. The U.S. central bank has two more scheduled policy meetings before the end of the year, in late-October and mid-December.

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