Copper fluctuates ahead of U.S. GDP data, Syria tension

Copper swung between gains and losses on Thursday as escalating tension in Syria which limited demand for riskier assets was weighed against the upcoming U.S. GDP data that might show the worlds biggest economy has expanded more than previously estimated in the second quarter.

On the Comex division of the New York Mercantile Exchange, copper futures for delivery in December traded at $3.304 per pound at 9:21 GMT, down 0.22% on the day. Prices held in range between days high and low of $3.323 and $3.291 per pound respectively. The industrial metal slipped 0.6% on Wednesday, a third straight day of declines, extending current weeks fall to 1.5%.

The metal extended its weekly losses amid mounting pressure in the Middle East region. According to a U.S. official, President Barack Obama and his allies are working to define the objectives of a military strike against Syria. It won’t be limited to a one-day operation but Obama said on Wednesday that a “tailored, limited” strike, unlike the unpopular Iraq war, might be enough to send a message that the use of chemical weaponry will not be tolerated. Obama made clear that any military intervention will be limited to avoid dragging the U.S. in another war in the Middle East. Adding to the built up pressure, the U.S. and Great Britain said they are prepared to launch a military attack without being authorized by the U.N. security council.

The metal was pressured by a stronger dollar, which put downward pressure on dollar-denominated commodities. The dollar index, which tracks the greenback’s performance against six major peers, rose for a second day and traded at 81.86 at 9:20 GMT, up 0.52% on the day. Prices ranged between day’s high of 81.90, the strongest level since August 13, while day’s low was touched at 81.42. The U.S. currency gauge rose 0.4% on Wednesday and extended its weekly advance to 0.5%.

Wu Jianguo, an analyst at Maike Futures Brokerage in Shanghai, said for Bloomberg: “People are watching developments in Syria as the market lacks upside momentum.”

Defense Secretary Chuck Hagel told the BBC the U.S. military is “ready to go” if Obama makes the order. “We have moved assets in place to be able to fulfill and comply with whatever option the president wishes to take,” Hagel said yesterday during a trip to Brunei for the BBC. This comes after U.S. Secretary of State John Kerry announced on Monday 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.

Copper however drew support as upcoming data on Thursday may show an advancing recovery of the U.S. economy, which is the second biggest consumer of the metal. The U.S. Preliminary Revised GDP is likely to have grown by 2.2%, up form July 31′s Advance GDP reading of 1.7%. Meanwhile, weekly jobless claims data may show that the number of people who filed for initial jobless benefits in the week ended August 24 have fallen.