IV:Copper futures hit 2-week high on China inflation data, Chile strike
Investing.com - Copper futures rose to a two-week high during European morning trade on Tuesday, after data showed that inflation in China slowed more-than-expected last month, reducing pressure on policy makers in Beijing to tighten monetary policy as the country recovers from a slowdown.
China is the world’s largest copper consumer, accounting for almost 40% of world consumption last year.
On the Comex division of the New York Mercantile Exchange, copper futures for May delivery traded at USD3.395 a pound during European morning trade, up 0.7% on the day.
New York-traded copper prices rose by as much as 1% earlier in the session to hit a daily high of USD3.405 a pound, the strongest level since March 28.
Official data released earlier showed that consumer prices in China rose 2.1% in March from a year earlier, below expectations for a 2.5% increase and slowing sharply from a 3.2% rate of increase in February.
The slower-than-expected rise in inflation will allow Beijing to keep monetary policy easy and supportive of copper demand in the world's largest consumer of the industrial metal.
Fresh concerns over a disruption to global supplies further supported prices as miners in Chile were set to hold their first nationwide strike on Tuesday for 24 hours to push for greater job security.
Chile is the world’s biggest producer of the red metal, providing almost a third of the world's supply.
Copper prices found further support from weakness in the U.S. dollar, as dollar-priced commodities become less expensive to investors holding other currencies when the greenback drops.
The dollar index, which tracks the performance of the greenback against a basket of six other major currencies, was down 0.25% to trade at 82.67.
A weaker dollar boosts demand for raw materials as an alternative investment and makes dollar-priced commodities cheaper for holders of other currencies.
Elsewhere on the Comex, gold for June delivery added 0.1% to trade at USD1,573.45 a troy ounce, while silver for May delivery eased up 0.4% to trade at USD27.25 a troy ounce.
