Jan 09, 2012 NEW YORK (Dow Jones)--Copper futures slipped on Monday as cautious investors moved to the sidelines ahead of a week expected to bring little in the way of good news from the euro zone.
The most actively traded copper contract, for March delivery, fell 1.90 cent, or 0.5%, to settle at $3.4160 a pound on the Comex division of the New York Mercantile Exchange.
European stock markets ended mostly lower after the leaders of Germany and France turned up the pressure on Greece and its international creditors. Other investors were disappointed by a weak reading on German industrial production.
That set a cautious tone for the copper market, as traders shunned large bets on the metal ahead of a week filled with European debt sales and summits. On Thursday, the European Central Bank is expected to announce its latest interest-rate decision and hold a press conference.
Worries about the financial health of the euro zone have weighed on copper prices in recent months, as a credit freeze there could rattle the industrial economy. Copper is used in a wide range of applications in construction and manufacturing, making it sensitive to shifts in the economic outlook.
"The (euro zone) remains the epicenter of the financial market turmoil," analysts with Deutsche Bank said in a note. The analysts said industrial metals prices were poised to fall further in the coming months under the weight of the worsening economic picture in Europe and fears that top commodities consumer China may stumble.
Citigroup on Monday lowered its 2012 copper-price forecast by 7%, to $3.55 a pound, citing weak demand in the West, and particularly in Europe.
Money managers and other large speculators tracked by the Commodity Futures Trading Commission halved their bearish bets on Comex copper futures and options in the latest week. Such funds have been bearish on copper prices since mid-September, as slumping global growth hit the demand outlook for the industrial metal.
"People are just watching and waiting to see what happens with all these moving parts right now" in the euro zone, said Edward Meir, an analyst with INTL FCStone. "There's a lack of conviction, prices have hardly moved over the last two months."
Copper settlements (ranges include electronic and pit trading):
Jan $3.4125; down 1.85 cents; Range $3.3960-$3.4175
Mar $3.4160; down 1.90 cents; Range $3.3780-$3.4420