Copper Continues To Tumble

Copper continued to fall this morning giving up 2 points after falling to its lowest price in almost two months as the greenback climbed and data from China upset traders as the world’s largest consumer of metal, any lackluster data has a direct effect on base metals especially copper. Copper is trading at 2.669.

Base metals shrugged off mostly better-than-expected data from China. Industrial production hit 6.1 percent and retail sales came in as expected at 10.1 percent but fixed asset investment was lower than the previous 11.4 percent. “[These] tallied more or less with expectations and point to a stabilizing Chinese economy,” Commerzbank said. “Stimulus measures implemented by the government and central bank should lend further support to the Chinese economy in the coming months, which is likely to be reflected in solid demand for metals.”

Stronger oil prices and a softer dollar provided support yesterday but the euro has handed back some of its gains today – it was last at 1.1266 against the greenback, having hit its highest since May 18 above 1.13 on Wednesday.

An increase in factory output in China failed to convince investors that stimulus measures were strong enough to lift growth.

Copper declined as much as 1 percent after gaining 0.3 percent. Industrial output grew by 6.1 percent in May from a year earlier, a slight improvement from a March figure that was the weakest since 2008, according to data Thursday from the National Bureau of Statistics. Fixed-asset investment missed estimates, the data showed. China granted an additional 1 trillion yuan ($161 billion) quota to provinces to swap high-interest debt into low-cost bonds on Wednesday to ease a credit crunch.

Precious metals were more focused on US retail sales which printed much better than expected stoking the Federal Reserve rate increase timing debate. The US dollar gained to trade at 95.02 while gold eased off its $1185 price to close just a hair above the $1180 price and is trading at 1182.30. Silver remains below its resistance level at 15.973 and platinum eased moving opposite gold and silver to fall $1.75 to 1106.10. Gold is headed for the first weekly climb in a month as the International Monetary Fund’s decision to walk out of talks with Greece on financial aid outweighed the outlook for higher U.S. interest rates. The IMF said its team flew out of Brussels after failing to make progress on a debt deal needed to help Greece avoid default. European Union President Donald Tusk abandoned his neutral position as a broker of EU compromises, telling Greece’s Prime Minister Alexis Tsipras to stop maneuvering and decide whether to accept the conditions on financial aid. The standoff has fueled concern that Greece will exit the euro area; boosting bullion’s appeal as a safe haven.