Copper dips to seven-week low

Written by fe Bureau | New Delhi | Updated: Aug 14 2014, 07:31am hrs
Copper hit its lowest in seven weeks in intraday trade on Wednesday, as latest data on China's economy worsened concerns about the demand outlook in the world's largest consumer of the industrial commodity.

Three-month copper on the LME dropped to $6,911.75 a tonne, its meanest level since June 26, before recouping some of the losses to trade at $6,917 a tonne in official rings, still down 0.7%.

Data released on Wednesday showed the housing sector in China, which accounts for roughly 15% of its economy, has faltered this year as prices and sales dropped, leading to apprehension about risks to broader growth.

New construction declined 12.8% in January-July as developers sought to clear huge inventories. Importantly, the amount of cash flowing into the world's second-largest economy crashed to a near six-year low in July at about $44.34 billion, about one seventh of that in June, showed the data. Even retail sales lagged. China accounts for around 40% of global refined copper demand.

Among other metal, nickel prices could hit $25,000 a tonne by mid to late 2015, up 34% from the current LME price of $18,750 a tonne, according to BNP Paribas. the metal has already gone up by 34% so far this year. Tin prices lost 0.3% to $22,400 a tonne.

Gold stays flat

Gold prices remained flat in intraday trade on Wednesday as concern about dismal Chinese data and the crisis in Ukraine was offset by stronger dollar as well as equities.

Spot gold remained almost unchanged at $1,307.60 an ounce by 1156 GMT, still lagging the three-week high of $1,322.60 hit on Friday. US December gold futures lost 0.1% at $1,309.30.

The dollar gained 0.1% against a basket of currencies, gaining most support from a weaker euro, while European shares rose on relatively good corporate results.

Since gold is dollar-denominated, any appreciation of the greenback makes it unattractive for gold buyers using other currencies. Silver prices, however, gained 0.5% at $19.94 an ounce. Platinum increased 0.4% to $1,467.90 an ounce, while palladium rose 0.6% to $878.22 an ounce.