Copper Prices Declining As Global Growth Weighs Heavily On Industrial Metals

Gold eased a bit on Monday morning but not enough to signal any change in trading sentiment. Gold is trading at 1237.40 as trader’s countdown days to the October Federal Reserve meeting and this week’s slew of Chinese economic data. Protests in Hong Kong continue with the government facing tough choices this week as protestors continue to flood the streets. Dozens of people were reportedly injured in two nights of clashes that began late on Friday in the densely populated Mong Kok district of the Chinese-controlled city, including 22 police. Four people were arrested early on Sunday, police said. The area was calm early on Monday, although scores of protesters remained on the streets.

Silver is trading at 17.333 up by 2 points while platinum and palladium prices rose in response to upbeat car sales data from Europe. Both metals are widely used in car-exhaust filters, making their price sensitive to changes in global automotive demand. European car sales rose to 1.24 million vehicles in September and are up 6.1 per cent from the start of the year to 9.57 million. Platinum rose 0.8 per cent to $1,261.50, while palladium climbed 1.4 per cent to $756.70 an ounce.

On Friday copper closed up on the London Metal Exchange on reports that the Chinese central bank plans to provide more financial stimulus. This morning copper declined 15 points to trade at 2.991 with very little data or news to support any moves.  Reports that the People’s Bank of China plans to inject liquidity of around 200 billion yuan into 20 of its largest banks was supportive.  The People’s Bank of China has informed the joint-stock banks such as Industrial Bank Co. and Guangfa Bank to submit applications for the funds in the form of three-month loans from the central bank, the banking executives said. Interest rates on the loans are expected to be similar to the low rates on the 500 billion yuan funds given to the five state-owned banks, they said. Copper prices posted their steepest drop in seven months on fears that slowing global growth will reduce demand for the industrial metal.  Fresh signals of decelerating economies in China and the US sent copper prices to a one-week low. Factory gate prices in China and the US fell last month, while US retail sales and New York-area manufacturing activity was weaker than expected. China is the world’s largest copper user, accounting for about 40 per cent of global demand, while the US is second in line. Europe as a region exceeds the US but trails China with respect to annual copper consumption.  Copper prices have been mired in negative territory for all of 2014 as fears that global economic growth would run out of steam sapped investor appetite for the industrial metal.