Copper prices decline ahead of key U.S. data

Investing.com - Copper prices were lower on Wednesday, as traders eyed the release of key U.S. economic data later in the day for fresh indications on the timing of a rate increase.

On the Comex division of the New York Mercantile Exchange, copper for July delivery slipped 0.9 cents, or 0.32%, to trade at $2.727 a pound during European morning hours. Prices held in a range between $2.726 and $2.748.

Futures were likely to find support at $2.710, the low from June 1, and resistance at $2.784, the high from May 29.

A day earlier, copper prices tacked on 1.6 cents, or 0.59%, to close at $2.736, supported by a broadly weaker U.S. dollar.

The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was at a more than one-week low of 96.05.

The greenback dropped after data on Tuesday showed that factory orders fell 0.4% in April, confounding expectations for a 0.2% increase. On a year-over-year basis, factory orders dropped 6.4%, the sixth straight monthly decline.

The unexpectedly weak data sparked fresh fears over the outlook for second quarter growth after data last month showed that the U.S. economy contracted 0.2% in the first quarter.

Later in the day, the U.S. was to release the ADP jobs report for May, while the ISM was to report on service sector activity.

Market players were are also waiting for Friday's U.S. nonfarm payrolls report for further clues on when the Federal Reserve may raise interest rates.

A strong U.S. nonfarm payrolls report was likely to bring forward expectations on when the central bank will begin to raise rates, while a weak number could weigh on the dollar by undermining the argument for an early rate increase.

Meanwhile, hopes that Greece will soon reach an agreement with its international lenders on a cash-for-reforms deal boosted the euro.

Greece is due to make a €305 million payment to the International Monetary Fund on Friday but has warned that it will be unable to make the repayment if a deal is not reached by then.

Elsewhere, gold futures for August delivery dipped $5.20, or 0.44%, to trade at $1,189.20 a troy ounce, while silver futures for July delivery shed 13.9 cents, or 0.83% to trade at $16.66 an ounce.