Investing.com - Copper prices fell to two-week lows on Thursday, as ongoing strength in the U.S. dollar weighed on the red metal. Dollar-priced commodities become more expensive to investors holding other currencies when the greenback gains.
The dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was up 0.25% to 100.30, re-approaching the prior session's eight-month peak of 100.54.
Copper for March delivery on the Comex division of the New York Mercantile Exchange dipped 1.6 cents, or 0.77%, to trade at $2.029 a pound during morning hours in London. It earlier fell to $2.028, the lowest since November 24. Meanwhile, three-month copper on the London Metal Exchange slumped 0.89% to $4514.00 a metric ton.
On Wednesday, copper tumbled 3.8 cents, or 1.86%, as a combination of a stronger dollar and persistent worries over future demand prospects from top consumer China weighed.
Copper is down almost 35% since May amid expectations of higher interest rates in the U.S. and slower global economic growth, especially in China.
The Asian nation is the world’s largest copper consumer, accounting for nearly 45% of world consumption.
Elsewhere in metals trading, gold sank to the lowest level in almost six years on Thursday, amid mounting expectations that the Federal Reserve will raise interest rates at its December policy meeting.
Fed Chair Janet Yellen said on Wednesday that the central bank was still on track to hike rates this month, citing "continued improvement in the labor market" and "confidence that inflation will move back to our 2% objective over the medium term."
The comments came after payroll processing firm ADP said U.S. non-farm private employment rose by 217,000 last month, above expectations for an increase of 190,000.
Yellen will testify about monetary policy before Congress' Joint Economic Committee at 10:00AM ET later Thursday. She is expected to reinforce expectations that a December rate hike is likely.
The outcome of Thursday’s European Central Bank meeting will also be in focus. The ECB's latest interest rate decision is due at 12:45PM London time, or 7:45AM ET, with most of the focus likely to be on President Mario Draghi's press conference 45 minutes after the announcement.
The consensus is that the ECB will cut the deposit rate further into negative territory to -0.30% from -0.20%. Market analysts also expect the central bank to increase the size of its monthly quantitative easing program to €75 billion from the current €60 billion.
Also looming large is Friday's nonfarm payrolls report, the last jobs report before the Fed decides on interest rates at its December 15-16 meeting. A strong payrolls report was likely to cement expectations for a Fed rate hike later this month.