Copper prices traded near a two-week low on Wednesday, as market players digested a pair of reports on Chinese factory activity, amid growing concerns over a slowdown in the world’s second largest economy.
On the Comex division of the New York Mercantile Exchange, copper for May delivery hit an intraday low of $2.736 a pound, before trading at $2.747 during European morning hours, up 0.7 cents, or 0.27%.
A day earlier, copper hit $2.735, the lowest since March 20, before settling at $2.740, down 4.1 cents, or 1.49%.
Futures were likely to find support at $2.644, the low from March 20, and resistance at $2.809, the high from March 27.
Official data released earlier showed that China’s manufacturing purchasing managers’ index inched up to 50.1 this month, just above the 50-point level that separates growth in activity from contraction. Analysts had expected a reading of 49.7, down slightly from February’s reading of 49.9.
Meanwhile, the China HSBC (LONDON:HSBA) final manufacturing PMI was revised up to 49.6 in March from an initial estimate of 49.2 but down from 50.7 the previous month.
Despite the modest uptick in the headline number, the data underlined the view that policymakers in Beijing will have to introduce further stimulus measures to boost growth and spur economic activity.
The Asian nation is the world’s largest copper consumer, accounting for almost 40% of world consumption last year.
Elsewhere on the Comex, gold futures for June delivery inched up $1.70, or 0.14%, to trade at $1,184.90 a troy ounce, while silver futures for May delivery tacked on 2.0 cents, or 0.12% to trade at $16.61 an ounce.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was down 0.1% to 98.60 early on Wednesday.
The U.S. was to release the ADP report on private sector jobs growth later in the day.
Investors were also turning their attention to Friday’s U.S. employment report for February for further indications on the future path of monetary policy.
A strong U.S. nonfarm payrolls report was likely to add to speculation over when the Federal Reserve will begin to raise interest rates, while a weak number could weigh on the dollar by undermining the argument for an early rate hike.