Copper Prices Fall On Weak Manufacturing Data
Copper didn't have much of a chance to extend its brief rally.
Weak manufacturing data from the United States and China combined with a stronger dollar Monday to snap two consecutive days of higher copper prices. Copper for September delivery fell 6.95 cents to settle at $4.41 a pound.
The Institute for Supply Management, a trade group of purchasing executives, said U.S. manufacturing growth in July was the slowest since the recession ended two years ago.
It was another sign of sluggishness in the U.S. economy. Just last week, the government said economic growth in the first half of the year was the slowest since the end of the recession. The new manufacturing data suggested that the economy might remain slow through the third quarter.
In China, two surveys released Sunday showed that the country's manufacturing slowed further in July. It comes after the government imposed a number of measures in the past several months to try to slow down its rapidly growing economy and ease inflation.
Investors are concerned about future demand for copper, which is used in a variety of products from infrastructure to consumer goods.
"The long-term effects of copper are really supportive, but you've got to go six to 12 months out. In the short run, yeah, we're going to have these gyrations here," MF Global senior market strategist Phillip Streible said.
Many investors were more optimistic as the U.S. trading day began after President Barack Obama and congressional leaders said they had agreed on a compromise plan to raise the nation's borrowing limit ahead of Tuesday's deadline. That optimism waned after the manufacturing report was released.
In addition, the dollar was stronger against other currencies. Since commodities are priced in dollars, a stronger dollar makes them more expensive for buyers using other currencies.
Gold for December delivery fell $9.50 to settle at $1,621.70 an ounce, September silver dropped 79.7 cents to $39.309 an ounce, October platinum rose $9.30 to $1,794.60 an ounce and September palladium rose $1.80 to $829.50 an ounce.
Benchmark crude for September delivery fell 81 cents to settle at $94.89 per barrel on the New York Mercantile Exchange.
In other Nymex contracts, heating oil dropped 0.2 cent to settle at $3.0974 per gallon, gasoline fell 0.39 cent to $3.054 per gallon and natural gas rose 4.3 cents to $4.188 per 1,000 cubic feet.
Wheat for September delivery rose 4 cents to $6.765 per bushel, December corn rose 17 cents to $6.8575 a bushel and November soybeans rose 4.75 cents to $13.62 a bushel.