Jul 17, 2012 (Dow Jones) NEW YORK--Copper futures settled lower Tuesday after Federal Reserve Chairman Ben Bernanke delivered a downbeat assessment of the U.S. economy and did not talk about immediately taking new easing measures in his testimony to the Senate.
The most actively traded contract, for September delivery, fell 2.95 cents, or 0.9%, to settle at $3.4555 a pound on the Comex division of the New York Mercantile Exchange.
Copper futures touched an intraday low of $3.4315 a pound after Mr. Bernanke said the U.S. economy may be "stuck in the mud." The central bank chief expressed concern over persistently high unemployment and slowing business investment.
Mr. Bernanke's negative tone dented copper prices, as the metal has widespread applications in manufacturing and construction, and investors worry that slower growth will lead to lower demand for the metal.
Moreover, the Fed chairman avoided giving direct clues as to whether the bank would launch new measures to spur growth. This disappointed some investors, who had hoped to see hints of easy money.
Copper prices had rallied on the Fed's past liquidity measures, which had bolstered business activity and economic growth. Copper is widely used in goods like laptops, air conditioners and plumbing, and demand for the raw material increases as the economy expands.
"Metals like copper are a lot more sensitive to the actual aggregate demand aspect," said Bart Melek, senior commodity strategist with TD Securities. Mr. Melek added that copper prices would take time to react to new easy-money efforts, as additional easing efforts would need to percolate throughout the economy and lift demand.
Investors will get another chance to sift through Mr. Bernanke's words Wednesday, when the Fed chief presents his semiannual testimony and answer questions from the U.S. house of representatives.
Copper settlements (ranges include electronic and pit trading):
Jul $3.4530; down 2.80 cents; Range $3.4315-$3.5040
Sep $3.4555; down 2.95 cents; Range $3.4325-$3.5125