COMEX Copper contract for May delivery fell to $2.932 before the U.S. data release of Philly Fed Manufacturing Index.
The metal dropped by 0.05% today and made the low of $2.931 a pound. The metal has lost near to 11% this year as China has shown weak economic results in last two months. The metal fell highest among six industrial metals.
Yesterday in Fed economic projection inflation is anticipated to increase by 1.5% to 2.0% in next year which may lead to interest rate hike near to 1% from prevailing 0.25%. Expectation of Increase in interest rate has also affected metal prices.
Dollar index, a measure of dollar against the basket of six major currencies, reached at the month high as Fed continued tapering by $10 billion brought total stimulus down to $55b. Strengthening dollar is also a negative sign for metals. It reduces investment in hedge funds and attracts investors towards risky assets.
China, the largest consumer of copper, has rose threat of credit risk as Zhejiang Xingrun Real Estate Co collapsed. Slowing economic growth at world second largest economy could further deepen copper prices.
Today Federal Reserve of Philadelphia will release Manufacturing Index at 1400 GMT. The index is expected to improve this time as manufacturing industry has expanded better than expected. Last month the index fell to nine months low as new orders were down and inventories were mounting. Unemployment Claims and Existing Home Sales data will also be released today.
Better than expected results of U.S. economy may support copper prices today. We may see prices near to $2.98 if the readings are positive.