Investing.com - Copper futures bounced off the previous session's two-week low on Thursday, as investors looked ahead to a policy decision from the European Central Bank as well as key U.S. data scheduled for later in the session.
On the Comex division of the New York Mercantile Exchange, copper for December delivery tacked on 0.43%, or 1.3 cents, to trade at $3.140 a pound during European morning hours.
Prices held in a range between $3.127 and $3.145 a pound. Futures were likely to find support at $3.113, the low from August 20 and resistance at $3.174 a pound, the high from September 2.
Focus turns to the European Central Bank's policy meeting later in the day, amid speculation the central bank could unveil fresh stimulus measures to fight inflation and boost growth.
Market players are hoping the meeting will shed further light on the bank's plans to start asset purchases, a move that would weigh on the euro and boost the dollar.
A stronger U.S. dollar usually weighs on copper, as it dampens the metal's appeal as an alternative asset and makes dollar-priced commodities more expensive for holders of other currencies.
Investors also looked ahead to Friday’s U.S. employment report for August for further indications on the strength of the recovery in the labor market, a key factor in deciding the future path of monetary policy.
While the U.S. economy continues to gain steam, Federal Reserve Chair Janet Yellen has expressed concern over slackness persistent in the labor market.
On Thursday, the U.S. is to release trade-balance data, the ADP report on private-sector job creation and the weekly report on initial jobless claims. Also on Thursday, the ISM is to publish a report on U.S. service sector activity.
A recent batch of upbeat data underlined optimism over the strength of the economy and fuelled expectations that the Fed will begin to raise rates sooner than previously thought.
A day earlier, copper futures fell to a two-week low of $3.125 before settling at $3.127 a pound, down 0.89%, or 2.8 cents as ongoing concerns over the health of China’s economy dampened appetite for growth-linked assets.
Data released earlier in the week showed that factory growth in China slowed last month, indicating a recovery in the broader economy remains fragile and may need further government stimulus.
China is the world's largest copper consumer, accounting for nearly 40% of global demand.
Elsewhere on the Comex, gold for December delivery tacked on 0.24%, or $3.00, to trade at $1,273.30 a troy ounce, while silver for December delivery picked up 0.33%, or 6.3 cents, to trade at $19.25 an ounce.
In geopolitical news, Russian President Vladimir Putin said on Wednesday that he spoke to his Ukrainian counterpart Petro Poroshenko and while there was no peace deal, Putin issued a 7 point plan to end the five-month old conflict in eastern Ukraine.
Negotiators from Kiev, Moscow and pro-separatist rebels are due for more talks on Friday.