Dow Jones – Copper prices edged down on Tuesday after weaker-than-expected economic data from China raised concerns over demand.
The base metal fell 0.51% to $6,863 in early afternoon trade, reversing a gentle rally Monday, driven by a combination of lower prices and supply disruptions.
Gold prices also moved lower, by 0.34% to $1,273.96 a troy ounce.
Chinese official data released Tuesday showed industrial production and fixed-asset investment growth slowed in October.
According to the National Bureau of Statistics, industrial output in China, the biggest consumer of base metals, grew by 6.2%, a tenth of a percentage point less than expected by the market.
"Copper is drifting lower on the back of Chinese output and consumption numbers," said Ole Hansen, commodity strategist at Saxo Bank, noting that both indicators softened in October, adding to the bearish sentiment.
With winter approaching, a traditionally weak season for Chinese demand, investors are worried that copper's rally this year may not continue.
Tighter credit conditions and a slowdown in the property market also pointed to cooling economic growth in China, Hansen said.
"The market will eagerly be awaiting the November production numbers, given that this should partly reflect the impact of the winter capacity cuts," said ING in a note.
US inflation focus
Meanwhile, traders were keeping a close eye on the US consumer-price index for October, due Wednesday, as a proxy for inflation and a potential driver of dollar moves that could have an impact on metals.
The WSJ Dollar Index, which measures the greenback against a basket of other currencies, was down 0.22% at 87.53 Tuesday.
Among precious metals, silver was down 0.59% at $16.95 a troy ounce, palladium fell 0.33% to $989.75 a troy ounce and platinum gained 0.05% to $933.45 a troy ounce.
Among base metals, zinc fell 1.13% to $3,183.50 a metric tonne, aluminium fell 0.19% to $2,106.50 a metric tonne, tin rose 0.41% to $19,475 a metric tonne, nickel fell 1.72% to $12,290 a metric tonne and lead fell 1.37% to $2,488.50 a metric tonne.