Investing.com - Copper prices slumped to the lowest level in more than five months on Monday, as risk sentiment was hit after Greeks overwhelmingly rejected conditions for a bailout package from creditors in a referendum on Sunday.
The latest reports from Greece said around 62% of those voting in the referendum had backed the government and rejected the bailout conditions. The result of the referendum has added to doubts over Greece’s future in the euro zone and deepened a standoff with its lenders.
Copper for September delivery on the Comex division of the New York Mercantile Exchange lost 9.1 cents, or 3.48%, to trade at $2.526 a pound during European morning hours after hitting a session low of $2.505, a level not seen since February 3. Futures were likely to find support at $2.493, the low from February 3, and resistance at $2.646, the high from July 2.
European stock markets sank on Monday and the yields on Italian, Spanish and Portuguese bonds spiked after the "No" camp's strong victory on Sunday sparked concerns over a potential Greek banking collapse that could force the country out of the euro zone.
The euro was down 0.45% to 1.1060, after hitting a session low of 1.0970. The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was up 0.1% to 96.47, boosted by the weaker euro.
Greek Prime Minister Alexis Tsipras welcomed the outcome of the vote and said Athens was returning to negotiations with the express goal of reopening banks, which have been shut for over a week after capital controls were imposed.
Without more emergency funding from the European Central Bank, Greece's banks are facing a cash crunch within days. The ECB was to discuss whether to maintain emergency funding for Greek banks at their current restricted level later Monday.
In a surprise move, Greek Finance Minister Yanis Varoufakis resigned on Monday, despite the referendum results. In a statement, Varoufakis said his decision was prompted in part by “some European participants” expressing a desire for his part in any further negotiations to end.
German Chancellor Angela Merkel and French President Francois Hollande were set to meet in Paris on Monday afternoon, while euro zone leaders were expected to hold a conference on Tuesday night to discuss the aftermath of the Greek referendum.
European officials have indicated that they will only continue to finance Greece in return for far-reaching economic reforms.
Elsewhere, gold futures for August delivery shed $4.70, or 0.4%, to trade at $1,163.10 a troy ounce, while silver futures for September delivery declined 10.8 cents, or 0.69% to trade at $15.54 an ounce.
Uncertainty over Greece has so far failed to spur increased investor demand for gold, often perceived as a safe-haven asset.