IV:Copper futures ease off 3-week low on global recovery hopes
Investing.com - Copper futures eased off the previous session’s three-week low during European morning hours on Wednesday, as appetite for growth-linked assets improved amid indications the global economic recovery was gaining momentum.
On the Comex division of the New York Mercantile Exchange, copper futures for March delivery traded at USD3.657 a pound during European morning trade, up 0.2% on the day.
New York-traded copper prices rose by as much as 0.5% earlier in the day to hit a session high of USD3.670 a pound. The industrial metal slumped to a three-week low of USD3.644 a pound on Tuesday.
Rising global equities markets boosted investor confidence, with the S&P 500 index closing at a five-year on Wall Street, while European equities surged following a report which showed that the ZEW index of German economic sentiment hit a 34-month high in February.
Copper is sensitive to the economic outlook because of its widespread uses in construction and manufacturing.
Copper traders now looked ahead to the release of the minutes of the Federal Reserve’s January meeting later in the day for hints regarding the central bank’s attitude towards monetary policy.
Any policy pause signal from the Fed minutes may send the U.S. dollar higher, pressuring dollar-denominated commodities, including copper.
U.S. housing data due later in the day will also be in focus as investors seek more cues on the country's economic health.
An improving housing sector not only boosts demand for copper as construction material, but also increases consumption from the home appliances sector.
Gains were limited after data out Wednesday showed foreign direct investment in China fell 7.3% in January from year-earlier levels.
The report came a day after the Chinese central bank drained liquidity from the money markets for the first time since June and China’s banking regulator announced stricter rules for lending to local governments.
China is the world’s largest copper consumer, accounting for almost 40% of world consumption last year.
Elsewhere on the Comex, gold for April delivery was flat to trade at USD1,604.10 a troy ounce, while silver for March delivery rose 0.35% to trade at USD29.52 a troy ounce.
