Investing.com - Copper futures slumped to a five-week low on Monday, after latest trade figures out of China added to concerns over the health of the world's second-biggest economy.
Copper for December delivery on the Comex division of the New York Mercantile Exchange declined 0.8 cents, or 0.33%, to trade at $2.234 a pound during morning hours in London. It earlier fell to $2.228, the lowest since August 24. On Friday, copper prices dipped 1.3 cents, or 0.58%.
Meanwhile, Copper on the London Metal Exchange dropped 0.28% to $4,966.75 a metric ton, a level not seen since August 26.
Data released Sunday revealed that Chinese exports slumped 6.9% from a year earlier in October, worse than forecasts for a decline of 3.0%, while imports plunged 18.8%, compared to expectations for a drop of 16.0%.
That left China with a record-high trade surplus of $61.6 billion last month, up from $60.3 billion in September.
China’s copper arrivals in October fell 8.7% from a month earlier to 420,000 metric tons, underlining worries over weakening demand prospects from the Asian nation.
The disappointing data reinforced the view that the economy remains in the midst of a gradual slowdown which will require policymakers in Beijing to roll out more measures to boost growth in coming months.
Market players now looked ahead to data on Chinese consumer and producer price inflation on Tuesday for further hints on the strength of the world's second-largest economy.
The report is expected to show that consumer prices rose 1.5% last month, compared to a reading of 1.6% in September, while producer prices are forecast to fall by 5.8%, which would be the 42nd straight monthly decline.
On Wednesday, the Asian nation is due to publish reports on industrial production, retail sales and fixed asset investment for October.
China is the world’s largest copper consumer, accounting for almost 40% of world consumption last year.
Elsewhere in metals trading, gold prices struggled near three-month lows, as investors continued to cut holdings of the precious metal amid expectations the Federal Reserve will raise interest rates at its next meeting in December.
The U.S. dollar held near seven-month highs against a basket of six other major currencies after data showing the U.S. economy created more jobs than expected in October bolstered expectations for a rate hike before the end of the year.
A stronger dollar reduces demand for raw materials as an alternative investment and makes dollar-priced commodities more expensive for holders of other currencies.
Investors now looked ahead to key U.S. data later in the week for further indications on the strength of the economy and the likelihood of a near-term rate hike.
The U.S. is slated to release data on retail sales, producer prices and consumer sentiment on Friday.
The timing of a Fed rate hike has been a constant source of debate in the markets in recent months. The U.S. central bank has one more scheduled policy meeting before the end of the year in mid-December.
Gold had rallied in October as concerns over a global economic slowdown led by China and its impact on U.S. growth prospects had prompted market participants to push back expectations for a rate increase to March 2016.
But the Fed's hawkish statement last week forced market players to readjust expectations for higher interest rates to as early as December, triggering a sell-off in the bullion market.
Expectations of higher borrowing rates going forward is considered bearish for gold, as the precious metal struggles to compete with yield-bearing assets when rates are on the rise.