A lack of clarity about world growth and development underscored preoccupations for global metal demand, pulling down copper futures on Wednesday, according to published reports.
But Reuters reports losses were minimized by the possibility of additional monetary stimulus from the U.S., host of the globe's largest economy.
One analyst told the news source that demand for metal is hinging on economic policy decisions.
"Sentiment is still pretty negative towards the growth outlook and markets now are waiting to see whether we do get some sort of policy response and if so what form that takes and what the implications could be for metals demand," analyst Gayle Berry with Barclays Capital told Reuters.
At 10:47 a.m. on Wednesday, copper futures fell 0.18 percent, a 0.006 cent loss to $3.365 per pound.
Intervention prospects rise
The reddish metal drew support from economic data indicating consumer prices were flat in the U.S. during the month of July, marking a second consecutive month.
The year-over-year increase last month marked its smallest since November 2010, which allows the U.S. Federal Reserve additional space to employ monetary stimulus programs to challenge the nation's unemployment rate.
"The market is looking for central banks' stimulus so what matters is whether the inflation data or any data makes it more or less likely," macro strategist Guy Wolf with Marex told the news source. "Today's data is pretty much in line with expectations. If inflation was racing away the market would interpret that very negatively but coming at this level the market sees it as not stopping central banks adding stimulus; so we are looking for risk assets, and metals among those, to rally in the short term."
Regarding the globe's top consumer
China, whose demand for copper amounts to about 40 percent of the world total and establishes the Asian nation as the world's biggest consumer, must work on its policies for growth during the next three months, a think tank official told Reuters.
Vice Chairman Zheng Xinli with the China Centre for International Economic Exchanges said China must enhance growth via investment, and one strong method of doing so is by working on high-speed rail.
Should China not work on upgrading its policies for development, the vice chairman said it runs the risk of missing its yearly target for growth.
Since copper has numerous uses in construction, industry and manufacturing, the globe's largest consumer of the metal would help increase its price if it were to employ growth tactics.
U.S. monetary stimulus prospects
Losses to the reddish metal were tempered by anticipations of intervention in the U.S., The Wall Street Journal reports.
With officials of the U.S. Federal Reserve set to convene later this month in Jackson Hole, Wyoming, for the body's yearly retreat, traders of the industrial metal are likely to watch for hints.
So too are they anticipating an announcement when the body meets in September for a policy meeting.
But the possibility exists that the central bank will not act until worse economic data returns.
"All we've heard is talk of world wide quantitative easing but, frankly, no one's opened up their wallet just yet," senior market strategist Charles Nedoss with Kingsview Financial told the news source.
Unclear economic outlook
The reddish metal is hovering and has no clear denouement at this time, according to Bloomberg.
One analyst stated all eyes are falling on economic data but, at the same time, the season now tends to be one of the slower periods for the commodity.
"Economic data seems to be weighing on the outlook," states a report penned by William Adams with Basemetals.com in London, according to Bloomberg. "We are in the middle of the summer lull and the economic outlook remains uncertain."
This material is conveyed as a solicitation for entering into a derivatives transaction.
This material has been prepared by a Daniels Trading broker who provides research market commentary and trade recommendations as part of his or her solicitation for accounts and solicitation for trades; however, Daniels Trading does not maintain a research department as defined in CFTC Rule 1.71. Daniels Trading, its principals, brokers and employees may trade in derivatives for their own accounts or for the accounts of others. Due to various factors (such as risk tolerance, margin requirements, trading objectives, short term vs. long term strategies, technical vs. fundamental market analysis, and other factors) such trading may result in the initiation or liquidation of positions that are different from or contrary to the opinions and recommendations contained therein.
Past performance is not necessarily indicative of future performance. The risk of loss in trading futures contracts or commodity options can be substantial, and therefore investors should understand the risks involved in taking leveraged positions and must assume responsibility for the risks associated with such investments and for their results.
Trade recommendations and profit/loss calculations may not include commissions and fees. Please consult your broker for details based on your trading arrangement and commission setup.
You should carefully consider whether such trading is suitable for you in light of your circumstances and financial resources. You should read the "risk disclosure" webpage accessed at www.DanielsTrading.com at the bottom of the homepage. Daniels Trading is not affiliated with nor does it endorse any third-party trading system, newsletter or other similar service. Daniels Trading does not guarantee or verify any performance claims made by such systems or service.