FX:Copper futures climb 1% on hopes for U.S. fiscal cliff resolution
Forexpros - Copper futures were higher for a second day on Monday, as optimism U.S. lawmakers will reach a compromise to avert the looming fiscal crisis boosted appetite for riskier assets.
On the Comex division of the New York Mercantile Exchange, copper futures for December delivery traded at USD3.485 a pound during European morning trade, up 0.95% on the day.
New York-traded copper prices rose by as much as 1.1% earlier in the day to hit a session high of USD3.490 a pound, the strongest level since November 14.
Investors continued to monitor developments surrounding the looming “fiscal cliff” in the U.S., approximately USD600 billion in automatic tax hikes and spending cuts due to come into effect on January 1.
Sentiment was bolstered after U.S. Congressional leaders said talks with President Barack Obama on Friday to avert the fiscal crisis were "constructive."
There are fears the U.S. economy will fall back into a recession, unless a divided Congress and the White House can work out a compromise in the seven weeks left before the January 1 deadline.
Weakness in the U.S. dollar also contributed to gains. The dollar index, which tracks the performance of the greenback against a basket of six other major currencies, was down 0.2% to trade at 81.09.
A weaker dollar boosts demand for raw materials as an alternative investment and makes dollar-priced commodities cheaper for holders of other currencies.
Greece also remained in focus. Concerns over the country’s debt woes persisted amid disagreements between the International Monetary Fund and Europe on how best to reduce the country’s debt to manageable levels.
A decision on disbursing the country’s next tranche of aid, worth EUR31.5 billion, was expected Tuesday at a meeting of euro zone finance ministers.
Europe as a region is second after China in global demand for the industrial metal and worries over its economic growth have kept copper prices under pressure in recent weeks.
Elsewhere on the Comex, gold for December delivery added 0.5% to trade at USD1,722.95 a troy ounce, while silver for December delivery rose 0.85% to trade at USD32.64 a troy ounce.
