Investing.com - Copper futures held near a three-week low struck in the previous session on Thursday, amid growing concerns over the demand outlook in China and as investors await a European Central Bank policy decision
On the Comex division of the New York Mercantile Exchange, copper for July delivery held in a range between $3.088 and $3.107 a pound. Prices last traded at $3.097 a pound during European morning hours, up 0.11%, or 0.4 cents.
The red metal fell to $3.084 on Wednesday, the lowest since May 9, before settling at $3.093, down 1.4%, or 4.4 cents.
Futures were likely to find support at $3.054 a pound, the low from May 9 and resistance at $3.142 a pound, the high from June 4.
Copper tumbled on Wednesday amid reports Chinese authorities are investigating whether companies used the same copper, aluminum and iron ore stocks held in Qingdao as collateral for multiple loans.
Copper is used as collateral by companies and investors in China, in an effort to work around strict lending standards enforced by Beijing.
China is the world’s largest copper consumer, accounting for almost 40% of world consumption last year.
Meanwhile, investors were jittery ahead of the European Central Bank''s upcoming policy decision later in the day.
Market analysts expect the ECB to lower its benchmark interest rate to a record-low 0.1% from the current 0.25% and launch a package of other stimulus measures as a way to bolster low levels of inflation and sluggish growth.
Elsewhere on the Comex, gold for August delivery dipped 0.11%, or $1.40, to trade at $1,242.90 a troy ounce, while silver for July delivery shed 0.26%, or 4.9 cents, to trade at $18.74 an ounce.
Ongoing indications that the U.S. economy is shaking off the effects of a weather-related slowdown over the winter continued to weigh on appetite for the precious metals.
The Institute of Supply Management on Wednesday said its non-manufacturing index rose to a nine-month high of 56.3 in May, from a reading of 55.2 the previous month, compared to expectations for a rise to 55.5.
The upbeat data overshadowed a report from payroll processing firm ADP, which said non-farm private employment rose by 179,000 in May, below expectations for an increase of 210,000.
Traders awaited Friday''s report on U.S. nonfarm payrolls for further indications on the strength of the U.S. job market after a data on Wednesday showed that private sector jobs rose less than expected last month.
Gold has been under heavy selling pressure recently as investors bet on strong economic growth in the U.S. during the second quarter.