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Copper at Monthly Low Following Worries About Demand

August 6, 2014 at 19:09 by Andriy Moraru

Copper prices continued to decrease further today, reaching the lowest level since late June, as the traders reacted to the news of a possible economic stagnation in Europe and lower withdrawals of the metal from the LME warehouse in London.

Germany reported a 3.2 percent decline in factory orders for the month of June today. Meanwhile, Italy has re-entered recession, reporting the second negative quarterly GDP change in a row. According to the Q2 preliminary report, Italian GDP lost 0.2%. Both these fundamental indicators are very important for copper as they signal an economic stagnation and thus warn investors of lower expected demand.

Technical analysis is now point out a double top formation on the daily chart of copper. It is a bearish pattern that may lead to a bearish rally if the price does not pull-back during the next few days.

Copper - Double Top as of 2014-08-06

Copper fell from $3.1913 per pound to $3.1538 per pound or about 1.1 percent as 18:34 GMT today. The intraday low was at $3.1475 per pound — the lowest level since June 30.

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