Commodities: industrial metals decline on prospect of reduced Chinese demand

FXStreet (London) - Copper prices fell overnight on concerns over declining demand after a Chinese news source reported that some banks had tightened real-estate lending.

Declining industrial demand

The report from Shanghai Securities News said that Industrial Bank co. along with other banks had curbed lending to property developers. The prospect of a slowdown in construction spending in China, the world's largest copper consumer, has knocked 1.23 percent off copper prices, with May contracts currently trading at USD322/lb.

Prices had already been given room for downside after a report released on Friday showed that copper stockpiles had reached a nine-month high.

In addition to copper declines, aluminium and zinc have also seen falls on decreased industrial demand expectations.

Gold rises on growth worries

Gold has risen to a four-month high on US economic growth concerns. US home sales fell to a one-year low on Friday, suggesting a weakening of consumer confidence.

While much of the weak US economic data published so far in 2014 has been written off as affected by the below-normal US temperatures and poor weather conditions, concerns remain over the pace of US growth, fuelling haven demand for gold. The precious metal is currently trading at USD1,332.24/oz, up 0.6 percent.

In addition, silver prices have rallied strongly. Spot silver is currently trading at USD22.06/t oz, up 1.23 percent.

Cold weather adds to natural gas rally

Natural gas futures continued their big 2014 rally, surging to five-year highs on the prospect of continuing below-normal US weather conditions.

Forecasted possibility of the return of disruptive snow to the Northeast has helped push natural gas contracts for May delivery to USD6.44, up 4.94 percent.