(MENAFN - FxPro) Copper prices slumped after China reported mixed trade data that showed overcapacity in manufacturing weighing as weak external demand hurts exports.
China's trade surplus reached $46.6 billion in June, while imports in U.S. dollar terms fell 6.1%, a better showing that the 15% drop expected year-on-year. Exports gained 2.8%, a good boost above the 0.2% fall seen.
Copper for September dropped 1.32% at $2.509 a pound after the data and from an already weak morning start.
Elsewhere in metals trading, gold futures for August delivery on the Comex division of the New York Mercantile Exchange rose 0.27% to $1,161.00 a troy ounce. Also on the Comex, silver futures for September delivery gained 0.20% to $15.512 a troy ounce as markets assessed the scope for a deal on Greece's debt.
Greece and its international creditors remain divided on the full terms for a new bailout agreement, reports said Sunday in Europe, with Germany adopting the toughest stance with demands that could prevent the speedy release of liquidity to the country's banking sector.
Greece may get ‚¬7 billion in "bridge" finance before July 20 to enable it to make payments and keep the banking system afloat while parliament passes a long list of tough reforms, EU sources said of the most promising effort so far in last-minute talks on Sunday to secure a deal.
According to an assessment drafted by the Eurogroup and provided to euro zone leaders in Brussels on Sunday, Greece needs a total of ‚¬7 billion before July 20 to cover its financing needs, with ‚¬3.5 billion of that amount being owed to the European Central Bank.
Leaders are discussing using a mixture of ‚¬1.9 billion still owed to Greece from profits the ECB made as part of its securities markets program as well as a potential cash disbursement from ‚¬13 billion still lying dormant inside the European Financial Stabilisation Mechanism, an old bailout fund created in 2010 to provide financial assistance to EU member states.
A qualified majority inside the ECOFIN Council, which means 16 out of 28 countries, would have to vote in favor of it, according to reports.
Last week, gold ended the week lower on Friday, amid indications U.S. interest rates will start rising later this year and as investors continued to monitor developments surrounding talks between Greece and its international creditors.
Federal Reserve Chair Janet Yellen said in a speech Friday that the central bank is on track to raise interest rates at some point this year. The comments from Yellen are her most definitive to date on the timing of a 2015 rate hike.
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.
Equity markets in China plunged sharply over the past three weeks, forcing policymakers to intervene and provide measures to boost liquidity and calm investors.
Market players are concerned that the plunge in the stock market could spread to other parts of the Chinese economy, triggering fears that the Asian nation's demand for the industrial metal will decline.
China is the world's largest copper consumer, accounting for almost 40% of world consumption last year.
In the week ahead, China is to release data on second quarter growth, while monetary policy statements by the European Central Bank and central banks in Japan and Canada will also be in focus.