Copper prices edged lower on Monday, 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.
Copper for March delivery on the Comex division of the New York Mercantile Exchange dipped 0.6 cents, or 0.31%, to trade at $2.057 a pound during morning hours in London. It earlier fell more than 1% to a session low of $2.040.
Meanwhile, Copper on the London Metal Exchange declined 0.16% to $4570.25 a metric ton.
Copper prices found support late last week as China regulators were said to consider a probe into metal short-selling in the local market and amid reports that Chinese smelters are planning a meeting to consider taking action against falling prices.
Prices of the red metal are down almost 11% so far in November as expectations of higher interest rates in the U.S. and slower global economic growth, especially in China, weighed.
Elsewhere in metals trading, gold struggled near six-year lows on Monday, as market players braced for a hike in interest rates by the Federal Reserve next month.
Prices of the precious metal fell $13.80, or 1.88%, last week, the sixth straight weekly loss. For the month, gold is down 7.5%, amid mounting expectations the Federal Reserve will raise rates for the first time in nearly a decade at its mid-December meeting.
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.
The dollar index rose to the highest level since April, amid growing expectations for tighter monetary policy in the U.S. in the coming months.
In the week ahead, investors will be focusing on Friday’s U.S. nonfarm payrolls report for November, the last jobs report before the Fed decides on interest rates at its December 15-16 meeting.
Market players will also pay close attention to a speech by Fed Chair Janet Yellen on Wednesday and congressional testimony on Thursday.
The outcome of Thursday’s European Central Bank meeting will also be in focus amid speculation the central bank could ramp up its monetary stimulus program.