Copper falls on weak U.S. durable goods orders, Syrian unrest

Copper fell on Tuesday following Mondays disappointing durable goods orders which spurred concern over demand prospects of the metal in the worlds second biggest consumer. Escalating tension in the Middle East stoked market sentiment as investors preferred to avoid riskier assets.

On the Comex division of the New York Mercantile Exchange, copper futures for delivery in December fell to $3.321 a pound at 8:30 GMT, down 0.18% on the day. Prices held in range between days high and low of $3.358 and $3.321 per pound respectively. The industrial metal fell 0.5% on Monday and extended its weekly 1.0% on Tuesday after falling 0.25% the preceding week.

Copper swung between gains and losses last week as speculations that the Federal Reserve will begin winding down its monetary easing program soon offset upbeat manufacturing data from the U.S., E.U. and China. The industrial metal was further pressured on Monday following the release of disappointing U.S. durable goods orders, which dampened demand prospects in the worlds second largest consumer.

The commerce department reported on Monday that U.S. durable goods orders dropped by 7.3% in July, mismatching analysts’ projections for a decrease by 4.0% after advancing in June. The preceding month’s reading was revised down to a gain of 3.9% from 4.2%.

Durable Goods Orders ex Transportation, which exclude the more volatile transportation items, marked a 0.6% contraction, underperforming expectations for a 0.5% gain. June’s reading was initially measured as remaining flat but received an upward revision to a 0.1% increase.

Durable Goods Orders ex Defense, which exclude defense expenditures, contracted by 6.7% last month, mismatching an anticipated 2.6% drop from June’s advance of 2.9%, which was revised downward by 0.1% from 3.0%.

Shipments of core capital goods, a category used to calculate quarterly economic growth, declined by 1.5% in July, compared to expectations for a 0.3% increase.

Hwang Il Doo, a senior trader at Korea Exchange Bank Futures Co., said for Bloomberg: “The U.S. durable-goods orders were a surprise. That deepened concerns over U.S. metal demand. The unrest in Syria also damped a market sentiment as investors tried to avoid risky assets.”

Copper was further pressured as investors strayed away from riskier assets amid growing expectations that the U.S. will intervene in the Syrian civil with the support of its Western nation partners. Tension escalated after a chemical attack against civilians in the Damascus suburbs was reported last week. U.S. Secretary of State John Kerry said that there is “undeniable” evidence the Syrian regime led by President Bashar al-Assad used chemical weaponry against civilians in the Damascus suburbs last week. Assad denied responsibility and blamed rebels for staging the attacks.

Meanwhile, United Kingdom’s foreign secretary William Hague said his country is convinced that Assad’s regime was behind the attack and that an agreement was met with the U.S. and France for the need of a response. The U.K. government will decide today whether to recall Parliament and seek approval for taking action. The U.S. and its allies have already met in Jordan for what could be a council of war.