IV:Copper futures jump 2% after China PMI improves
Investing.com - Copper futures rallied on Monday, after manufacturing data on China signaled an improvement in the world’s second-largest economy and biggest user of the industrial metal.
On the Comex division of the New York Mercantile Exchange, copper futures for December delivery traded at USD3.291 a pound during European morning trade, up 1.8%.
Prices rose by as much as 2.3% earlier in the day to hit a session high of USD3.310 a pound. The December contract settled 0.85% lower at USD3.233 a pound on Friday.
Copper prices were likely to find support at USD3.223 a pound, the low from August 30 and resistance at USD3.323 a pound, the high from August 29.
Trading volumes were expected to remain light on Monday, with U.S. markets closed for the Labor Day holiday. Regular trading on Comex will resume on Tuesday following Monday’s Labor Day holiday.
Data released earlier showed that China’s final HSBC Purchasing Managers Index inched up to a four-month high of 50.1 in August, unchanged from a preliminary reading and up from 47.7 in July.
The upbeat data was published one day after a government report showed that China’s manufacturing purchasing managers' index climbed to a 16-month high of 51.0 in August from 50.3 in July, beating forecasts for 50.6.
A reading above 50.0 indicates industry expansion, below indicates contraction.
Copper traders consider shifts in the Asian nation’s PMI an indicator of China's copper demand, as the industrial metal is widely used by the sector.
China is the world’s largest copper consumer, accounting for almost 40% of world consumption last year.
Meanwhile, fading expectations for imminent U.S. military action against Syria further supported appetite for riskier assets.
President Obama said Saturday that he will first seek approval from Congress before ordering a military strike against Syria. A decision is not expected before September 9, when U.S. lawmakers return from their summer recess.
Copper prices tumbled to a three-week low of USD3.223 a pound on August 30 amid growing speculation the U.S. was moving closer to taking military action against Syria’s government.
U.S. Secretary of State John Kerry said Friday that the U.S. would punish Syrian President Bashar al-Assad for a "brutal and flagrant" chemical weapons attack that killed nearly 1,500 people in Damascus last week.
Elsewhere on the Comex, gold for December delivery fell 0.2% to trade at USD1,393.40 a troy ounce, while silver for December delivery rallied 2.9% to trade at USD24.19.
