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Copper Retreats From Two-Week High As Investors Doubtful Over Chinese Demand

Summary:
Copper futures are hitting the pause button after reaching their best levels in two weeks. Despite Chinese economic figures coming in better than expected, they were not enough to support the idea that there would be enough demand for the industrial metal. Still, copper prices are up more than 2% on the year and traders will take that after kicking off the year down 10%. October copper futures tumbled %excerpt%.01, or 0.35%, to .70 per pound at 17:25 GMT on Tuesday on the Comex division of the New York Mercantile Exchange. Copper pared its gains after touching a two-week high. Chinese economic growth in the second quarter came in at 6.2%, down from 6.4% in the previous quarter. The world’s second-largest economy is now seeing growth at a 27-year low. But there was a flurry of other pieces

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Copper futures are hitting the pause button after reaching their best levels in two weeks. Despite Chinese economic figures coming in better than expected, they were not enough to support the idea that there would be enough demand for the industrial metal. Still, copper prices are up more than 2% on the year and traders will take that after kicking off the year down 10%.

October copper futures tumbled $0.01, or 0.35%, to $2.70 per pound at 17:25 GMT on Tuesday on the Comex division of the New York Mercantile Exchange. Copper pared its gains after touching a two-week high.

Chinese economic growth in the second quarter came in at 6.2%, down from 6.4% in the previous quarter. The world’s second-largest economy is now seeing growth at a 27-year low.

But there was a flurry of other pieces of data that boosted investor sentiment. In June, retail sales surged 9.8%, industrial output advanced 6.3%, fixed asset investment clocked in at 5.8%, and the house price index rose a solid 10.3%.

Domestic investment in power equipment also sparked interest from metal investors because this could renew activity in industrial metals.

That said, it still might not be enough to push prices significantly higher, though it could sufficient to keep prices in the $2.70 to $2.80 range. At the same time, there have been positive developments during the down period for China. But until Beijing resolves the bitter trade dispute with the US, there will remain a great deal of uncertainty, something that was on display after a recent tweet from President Donald Trump:

China’s 2nd Quarter growth is the slowest it has been in more than 27 years. The United States Tariffs are having a major effect on companies wanting to leave China for non-tariffed countries. Thousands of companies are leaving. This is why China wants to make a deal….

After US-China trade negotiations were restarted, it was reported that the White House is considering easing restrictions on Huawei, the Chinese telecommunications provider that has been the center of controversy as of late. But then it was confirmed that Huawei is getting ready to lay off hundreds of American workers, so anything is up in the air.

As has been the case for months, trade talks take one step forward and two steps back.

Copper has been further sliding on a strengthening dollar as the greenback soared 0.45% to 97.37. A stronger buck is bad for dollar-denominated commodities because it makes it more expensive for foreign investors to purchase.

In other metal markets, August gold futures dipped $2.20, or 0.15%, to $1,411.30 per ounce. September silver futures tacked on $0.31, or 2.02%, to $15.675 an ounce. September platinum futures edged up $0.70, or 0.08%, to $845.90 per ounce. September palladium futures crashed $50.20, or 3.21%, to $1,512.70 an ounce.

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Andrew Moran
I am a full-time professional writer. Prior to my self-employment, I worked as a reporter for Digital Journal covering the politics beat and The Toronto Times reporting on the city’s entertainment scene. I currently write mostly about business, marketing and finance

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