Copper for December settlement on the Comex division of the New York Mercantile Exchange tumbled 4.40 cents or 1.4% to $3.1950 per lb. Yesterday, the contract traded at the highest levels since August 2014.
“Generally robust macroeconomic conditions are reflected in the strong and steady rise in the LME copper price. Judging by the recent advance and limited pullback, market participants are generally bullish so we expect dips to remain well supported for now,” Metal Bulletin analyst Andy Farida said.
Increased optimism today stemmed from a better-than-expected print for China’s September producer price index (PPI) and expectations that the country’s third-quarter gross domestic product (GDP) reading is set to exceed previous estimates.
The Chinese PPI for September at 6.9% was up from 6.3% previously, also beating the previous forecast of 6.4%.
Chinese market participants’ growing optimism ahead of the forthcoming 13th Five-Year Plan meeting at the 19th Party Congress in Beijing is also playing a major role in higher prices.
Comex gold for December delivery fell $16.50 or 1.3% to $1,286.50 per oz.
Currency moves and data releases
- The US dollar index was up 0.37% at 93.65.
- In other commodities, the Texas light sweet crude oil spot price fell 0.69% to $51.78 per barrel.
- On the economic data side, there was a flurry of UK figures. Notably, the September CPI rose 3.0% as expected, while producer prices increased 0.2%. The eurozone CPI was up 1.5%, while the ZEW economic sentiment index was 26.7, down from forecasts and the previous reading.
- In the USA, the NAHB housing market index in October exceeded expectations at 68.0. The capacity utilisation rate in September stood at 76%, below the forecast of 76.2%. Industrial production month on month in September also disappointed at 0.3%. Lastly, import prices in September reached 0.7%.
- In addition, Bank of England governor Mark Carney and US Federal Open Market Committee member Patrick Harker are speaking.