Oct 11, 2011 NEW YORK (Dow Jones)--Copper futures slid Tuesday as investor caution about a closely watched vote on the euro zone's expanded bailout fund overwhelmed the cautious optimism that had pushed prices higher for four consecutive sessions.
Copper for December delivery, the most actively traded contract, was recently down 10.7 cents, or 3.2%, at $3.261 a pound on the Comex division of the New York Mercantile Exchange.
Traders Tuesday sold risky assets as Slovakia was set to vote on the euro zone's rescue fund. Slovakia is the only EU member state that has yet to approve an expansion of the European Financial Stability Facility. The EFSF was designed to contain the currency union's debt crisis.
Approval of the EFSF by Slovakia's parliament is not guaranteed, market participants said.
"A return of the sovereign debt doom and gloom, plus the added uncertainty surrounding the Slovakian vote" for ratification the EFSF kept pressure on growth-sensitive metals, Standard Bank analyst Leon Westgate said in a note.
Copper is particularly sensitive to the economic outlook because of its widespread uses across industries, and tends to fall when investors are dumping perceived risky assets. Other growth sensitive assets, including U.S. equities markets and crude oil futures, opened with losses Tuesday.
Copper had staged a tentative rebound after hitting 14-month lows last week, rising for four consecutive days as investors who had bet on falling copper prices reversed those bets. The copper market was under intense pressure beginning in September as investors cut their expectations for global growth. Risky assets were also pressed by fears that the debt-laden euro zone was sliding toward a credit crunch.
Speculative investors turned bearish on the prospects for copper futures and options in August, reversing almost two years of bullish bets, according to Commodity Futures Trading Commission data. Such traders have held more bearish than bullish bets for five of the last seven weeks tracked by the CFTC.