Investing.com - Copper prices inched up modestly on Monday, amid speculation policymakers in China will do more to support growth, but gains were limited as the dollar pushed higher.
On the Comex division of the New York Mercantile Exchange, copper for May delivery eased up 0.9 cents, or 0.33%, to trade at $2.777 a pound during European morning hours. Prices held in a range between $2.748 and $2.790.
On Friday, copper lost 4.3 cents, or 1.55%, to settle at $2.767. Futures were likely to find support at $2.644, the low from March 20, and resistance at $2.809, the high from March 27.
People's Bank of China Governor Zhou Xiaochuan said that China's government had to be "vigilant" against the risk of disinflation and suggested that policymakers had "room to act" to boost sluggish growth.
His comments came at the Boao Forum for Asia on Sunday, an annual conference on the southern Chinese island of Hainan.
The Asian nation is the world’s largest copper consumer, accounting for almost 40% of world consumption last year.
Comex copper prices have been well-supported in recent sessions amid speculation demand for the industrial metal will increase due to accommodative central bank policies in the U.S., Europe and China.
Meanwhile, the U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was up 0.3% to 97.90 early on Monday. The index slid 0.66% last week, the second consecutive weekly decline.
A stronger dollar dampens demand for raw materials as an alternative investment and makes dollar-priced commodities more expensive for holders of other currencies.
The dollar pushed higher against the euro and the yen after Federal Reserve Chair Janet Yellen reiterated Friday that the bank is likely to start raising interest rates later this year.
Investors were turning their attention to Friday’s U.S. employment report for February, and Monday’s data on personal spending for further indications on the path of monetary policy.
A strong U.S. nonfarm payrolls report was likely to add to speculation over when the Federal Reserve will begin to raise interest rates, while a weak number could boost gold by undermining the argument for an early rate hike.
Elsewhere on the Comex, gold futures for June delivery shed $12.00, or 1%, to trade at $1,188.70 a troy ounce, while silver futures for May delivery dropped 28.1 cents, or 1.65% to trade at $16.78 an ounce.
Gold often moves inversely to the U.S. dollar, as prices become more expensive for buyers using other currencies.