Copper crumbled to a four-month low on Monday as commodities slumped broadly on fears of a slowdown in global economic growth triggered by political deadlock in Greece and further signs of a struggling Chinese economy. In New York, the July COMEX contract dropped 9.40 cents or 2.6 percent to settle at $3.5540, after moving from a four-month low at $3.5425 and $3.6745.
On Sunday, China cut bank reserve requirements to free up an estimated 400 billion yuan ($63.5 billion) for lending in a bid to avert a sudden slowdown in the world's second-largest economy. The move fed concern about global growth, already dampened by the political turmoil in Europe.
Also on Sunday, coalition talks in Greece faltered, increasing the chance of a new election in mid-June. An inconclusive vote on May 6 left the country's political leaders divided on its 130 billion euro bailout, with neither side able to form a government.
"The euro zone remains in focus and the break below key support at $8,000 (a tonne) saw further liquidation in copper with the market still under heavy pressure from macro jitters and also following disappointing euro zone manufacturing output," said VTB Capital analyst Andrey Kryuchenkov. "The Chinese reserves cut provided very little support with the market largely ignoring it and hoping for a rate cut in the future instead."
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