May 08, 2012 NEW YORK (Dow Jones)--Copper prices settled at a two-week low Tuesday, as worries about Greece pushed broader markets lower and the euro fell below the psychologically important $1.30 level.
The most actively traded copper contract, for July delivery, fell 9.60 cents, or 2.5%, to settle at $3.6775 a pound on the Comex division of the New York Mercantile Exchange. This was the lowest settlement since April 23.
Greece has struggled to form a coalition government since Sunday's election, with hopes fading that political parties will avoid calling voters back to the polls as early as next month. Greece must form a government in order to pass budget cuts and other austerity measures required for the next tranche of bailout aid.
"The markets don't like that type of uncertainty. When in doubt, sell," said Matt Zeman, head of trading at Kingsview Financial.
The austerity measures have been highly unpopular with voters, but without the changes in place Greece again faces the prospect of a messy default on its debt.
"They have about 15 days of money left and there's been enough uncertainty and enough infighting that it's a good bet they're not going to meet the deadline," said Charles Nedoss, broker and futures analyst with Olympus Futures.
Fears about the European Union's future permeated the broader markets, triggering a rush to the perceived safety of the dollar and away from riskier assets.
The Standard & Poor's 500-stock index fell to a two-month low at 1351.65, and was recently down 1.3% at 1352.42.
Meanwhile, the euro breached below the $1.30 level several times throughout the trading day as continued deterioration in Europe saw investors pare exposure to the region's currency.
"It's been a struggle all day to maintain $1.30 and people are watching the euro very closely. If the euro gives way we'll have a strengthening in the dollar and that's going to be bearish for the metals and commodities complex," Zeman said.
Copper futures are denominated in dollars and appear more expensive to buyers using other curriencies.
Copper settlements (ranges include electronic and pit trading):
May $3.6855; down 9.20 cents; Range $3.6700-$3.7510
Jul $3.6775; down 9.60 cents; Range $3.6565-$3.7655