Copper eases off 5-week high on U.S. fiscal cliff concerns, Greece

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Forexpros - Copper futures turned lower during European morning hours on Monday, easing off a five-week high as traders continued to monitor developments surrounding Greece’s debt woes and the fiscal outlook in the U.S.
Copper prices were higher during the Asian trading session following the release of upbeat Chinese manufacturing data.
On the Comex division of the New York Mercantile Exchange, copper futures for March delivery traded at USD3.645 a pound during European morning trade, down 0.15% on the day.
New York-traded copper prices rose by as much as 0.45% earlier in the day to hit a session high of USD3.667 a pound, the strongest level since October 19.
Markets participants continued to monitor developments surrounding the looming “fiscal cliff” in the U.S., approximately USD600 billion in automatic tax hikes and spending cuts due to come into effect on January 1, unless a divided Congress and the White House can work out a compromise in the four weeks left before the deadline.
House of Representatives Speaker John Boehner spooked investors on Friday after saying there was a stalemate between Republicans and President Barack Obama’s administration.
He added that President Obama’s proposal of USD1.6 trillion in new tax revenue and less than USD400 billion in spending cuts was not “serious.”
There are fears that U.S. lawmakers will repeat the same political divisiveness that led Standard & Poor's to downgrade the U.S.’s AAA rating in August 2011 and tip the country back into a recession.
Meanwhile, in the euro zone, Greece launched a scheme to buy back its debt from private investors, as part of an agreement to unlock a new bailout package worth EUR44 billion.
Euro zone finance ministers were to hold talks in Brussels later in the day to discuss the terms of the new aid deal for Greece, after Germany’s parliament gave it the green light on Friday.
Copper prices rallied to a five-week high earlier in the session after a report from HSBC confirmed that manufacturing activity in China expanded for the first time in more than a year last month.
The final version of China’s HSBC Purchasing Managers Index rose to 50.5 in November from a final reading of 49.5 in October.
The data came after a report from the state-affiliated China Federation of Logistics and Purchasing over the weekend, which showed manufacturing activity improved to a seven-month high of 50.6 in November, up 0.4 point over October.
The upbeat data added to signs of growth recovery in the world’s largest copper consumer.
Elsewhere on the Comex, gold for February delivery added 0.45% to trade at USD1,720.25 a troy ounce, while silver for March delivery rose 1% to trade at USD33.61 a troy ounce.