Copper falls on US sales data and gold down on Europe worries

Copper falls on US sales data and gold down on Europe worries
205 times viewed. Thursday, 16 Feb 2012Copper futures fell overnight as disappointing US economic data sapped investor appetite for economically sensitive assets and a stronger dollar added to pressure on prices.

The most actively traded contract for March delivery, settled down 2.5 US cents or 0.7% at USD 3.8145 per pound on the Comex division of the New York Mercantile Exchange.

Weaker than expected US retail sales data set a sour mood early on with copper futures keeping in negative territory throughout the day. January US retail sales rose 0.4% from December falling well short of forecasts of 0.9% increase.

Mr Bob Haberkorn senior commodities broker at RJO Futures said that "This is the third month in a row of weak retail sales. This economy is a day to day thing. One day paints a rosy picture and the next not."

Copper prices are sensitive to downbeat economic news as the metal has broad applications in manufacturing and construction and demand tends to wane when business activity slows down.

Copper futures also faced pressure from a stronger dollar as the dollar denominated asset appears more expensive and tends to fall out of favor with investors who use other currencies when the dollar rallies.

According to the Center for European Economic Research, copper had edged higher in pre-market trading on reports showing German economic expectations had turned positive in February for the first time since May 2011.

Meanwhile, gold futures ended a touch lower overnight amid pressure from a stronger dollar and caution about an increasingly unstable European debt situation.

Eurozone finance ministers have scrapped a planned meeting in Brussels tonight to discuss a new bailout for Greece, replacing it with a teleconference. Senior officials said Greece hasn't given clear pledges on the implementation of fresh austerity measures.