IV:Copper futures climb to 6-week high after euro zone PMI data
Investing.com - Copper futures rose to a six-week high on Monday, following the release of upbeat euro zone manufacturing data, while investors eyed the Federal Reserve's upcoming policy meeting this week.
On the Comex division of the New York Mercantile Exchange, copper futures for March delivery traded at USD3.321 a pound during European morning trade, up 0.3%. Comex copper prices climbed to a session high of USD3.325 a pound earlier, the strongest level since November 1.
Copper prices were likely to find support at USD3.256 a pound, the low from December 11 and resistance at USD3.325 a pound, the high from November 1.
The March contract settled 0.5% higher on Friday to end at USD3.312 a pound.
Data released earlier showed that manufacturing activity in the euro zone expanded at the fastest pace since May 2011 in December.
Market research group Markit said that its preliminary manufacturing purchasing managers’ index inched up to a seasonally adjusted 52.7 this month from a final reading of 51.6 in November. Analysts had expected the index to inch up to 51.9 this month.
The upbeat data came after a report showed that manufacturing activity in Germany improved to a 30-month high this month.
Europe as a region is third in global demand for the industrial metal.
Copper traders shrugged off disappointing manufacturing data out of top consumer China.
Data on Monday showed that the preliminary reading of China’s HSBC manufacturing index ticked down to a three month low of 50.5 in December from a final reading of 50.8 in November. Economists had expected the index to rise to 51.0.
The Asian nation is the world’s largest copper consumer, accounting for almost 40% of world consumption last year.
Meanwhile, market players prepared for this week’s Federal Reserve meeting and possible news on the fate of the central bank’s bond-buying program.
The central bank is scheduled to meet December 17-18 to review the economy and assess monetary policy.
Recent signs of improvement in the labor market and last week’s agreement on a two-year U.S. budget deal were seen as removing obstacles to the winding back of monetary stimulus.
The Fed’s stimulus program is viewed by many investors as a key driver in boosting the price of commodities as it tends to depress the value of the dollar.
Elsewhere on the Comex, gold for February delivery dropped 0.35% to trade at USD1,230.20 a troy ounce, while silver for March delivery shed 0.4% to trade at USD19.52 a troy ounce.
