Investing.com - Copper prices bounced off a six-year low on Thursday, after the People's Bank of China reassured markets that it will not continuously devalue the yuan.
The central bank said in a closely-watched press conference earlier in the day that there was no basis for further depreciation in the yuan, easing concerns over a full blown currency war that could destabilize the global economy.
China's yuan opened slightly weaker on Thursday, but losses were limited as policymakers stepped up intervention in the market in a bid to stabilize prices.
Copper for September delivery on the Comex division of the New York Mercantile Exchange inched up 0.8 cents, or 0.34%, to trade at $2.358 a pound during European morning hours.
On Wednesday, copper tumbled to $2.292, a level not seen since June 2009, before turning higher to end at $2.350, after the People's Bank of China took initial steps to stabilize fluctuations in the yuan, one day after devaluing its currency by the highest amount in more than two decades.
China allowed the yuan to fall sharply this week to hit the lowest level since October 2012. The steep decline stoked concerns that China may allow the yuan to continue to depreciate, fueling fears over a currency war, as Beijing aims to make the nation's ailing exports more competitive on the global stage.
Copper prices have been under pressure in recent weeks amid growing concerns over the health of China's economy.
Data released Wednesday showed that China's industrial production increased at an annual rate of 6.0% in July, disappointing expectations for a 6.6% gain.
Figures released over the weekend showed that Chinese exports dropped 8.3% in July, their biggest fall in four months, while producer prices fell to a six-year low.
The Asian nation is the world’s largest copper consumer, accounting for almost 40% of world consumption last year.
Elsewhere, gold futures for December delivery shed $6.20, or 0.55%, to trade at $1,117.40 a troy ounce after hitting a session peak of $1,126.10, the strongest level since July 20.
Investors looked ahead to U.S. retail sales data later in the session for further indications on the strength of the economy and the timing of an interest rate hike.
The Commerce Department is expected to report at 8:30AM ET that retail sales rose by 0.5% in July, after falling 0.3% in June. Core sales are forecast to gain 0.4%, after dipping 0.1% a month earlier.
The U.S. is also to release data on initial jobless claims, import prices and business inventories later Thursday.
Some traders believe that the Federal Reserve could postpone raising interest rates at its September meeting in response to China’s currency devaluation move, as Fed officials are likely to remain concerned over global growth and inflation pressures.
Gold fell to a five-and-a-half year low of $1,072.30 on July 24 amid speculation the Fed will raise interest rates in September for the first time since 2006. But prices have since rebounded approximately 4.5% on hopes of a delayed U.S. rate hike.