Copper falls amid stimulus outlook and China data

Copper futures plunged to a five-week low on Tuesday as speculations about Feds monetary stimulus direction and weak China economic data weighed on demand for the metal.

On the Comex division of the New York Mercantile Exchange, copper futures for July delivery traded at $3.203 a pound at 9:31 GMT, down 1.18% on the day. Prices ranged between days low of $3.202 and high at $3.285 per pound.

Speculations for an earlier than expected Quantitative Easing scale back was once again spurred after last Friday the Bureau of Labor Statistic reported the U.S. labor market has created more jobs than expected. Although the Unemployment Rate surpassed forecasts by 0.1% and stood at 7.6%, also 0.1% higher than last month’s figure, the Change in Non-Farm Payrolls indicator rose to 175 000, 12 000 more than the 163 000 projection and significantly above the revised 149 000 value for April.

Uncertainty about Feds monetary stimulus was further continued to dwell after yesterday Standard & Poors improved its assessment of the U.S. credit rating and upgraded its AA+ outlook from negative to stable, one notch below the AAA rating, which the country lost two years ago.

After Chinese officials revealed information last week on manipulators who used currency conversions to boost export data, much lower figures were expected than forecast earlier. China’s industrial output mismatched expectations and rose 9.2% in May, below forecasts. Factory-gate prices dropped for a fifteenth straight month. Chinese exports jumped by only 1% in May and shipments to the U.S. and European Union, the Asian nation’s two biggest export targets, declined for a third straight month. China’s imports were projected to gain 6% but official figures strayed well below and showed a 0.3% decrease, marking a ten-month low.

Consumer inflation shrank to 2.1%, mismatching a 2.9% forecast and Producer Price Index (PPI) tumbled 2.9%, above expectations of a 2.5% decrease. The M2 money supply jumped 15.8%, missing 15.9% expectation. Retail Sales met projections of a 12.9% gain and so did Industrial Production with a 9.2% increase on an annual basis.

Meanwhile, gold futures for August delivery dropped below $1 370 an ounce. The precious metal traded at $1 367.45 at 9:46 GMT, down 1.34% on the day. Silver, platinum and palladium are following golds direction and all slipped more than 1%. Silver lost 1.48% and stood at $21.60 an ounce. Platinum for July delivery traded at $1 487.80, down 1.27% and palladium futures for September delivery were 1.03% lower at $761.50 an ounce at 9:48 GMT.