Investing.com - Copper prices edged higher on Thursday, on news that China's central bank was providing fresh stimulus to jump-start its economy.
On the Comex division of the New York Mercantile Exchange, copper for March delivery tacked on 0.7 cents, or 0.23%, to trade at $2.901 a pound during European morning hours.
A day earlier, copper prices lost 3.4 cents, or 1.18%, to settle at $2.893 a pound amid concerns over the health of China's economy.
Futures were likely to find support at $2.865 a pound, the low from December 9, and resistance at $2.947, the high from December 9.
The People's Bank of China injected 400 billion yuan, or nearly $65 billion, into the country's banking system to counter a slowdown in the world's second largest economy.
Data released Wednesday showed that inflation in China slowed to a five-year low of 1.4% in November from 1.6% in October. The producer price index fell by a more-than-expected 2.7% last month.
The disappointing data added to fears that China will miss its annual growth target of 7.5% and boosted speculation that the government will need to roll out fresh stimulus measures to avert a sharper slowdown.
The Asian nation is the world’s largest copper consumer, accounting for almost 40% of world consumption last year.
Elsewhere on the Comex, gold futures for February delivery dipped $9.50, or 0.77%, to trade at $1,219.90 a troy ounce, while silver futures for March delivery retreated 17.7 cents, or 1.03% to trade at $17.01 an ounce.
Market players shrugged off concerns over political instability in Greece ahead of a key data release from the European Central Bank.
The ECB will publish results of its second round of cheap long-term loans to the region's banks, known as a targeted long-term refinancing operation, or TLTRO, later in the session.
A lower-than-expected take up will add to expectations for quantitative easing by the ECB.
Later in the day, the U.S. was to release data on retail sales, as well as the weekly report on jobless claims for further indications on the strength of the economy.
Gold prices are likely to remain vulnerable in the near-term amid indications a strengthening U.S. economic recovery will force the Federal Reserve to start raising interest rates sooner and faster than previously thought.
Expectations of higher borrowing rates going forward is considered bearish for gold, as the precious metal struggles to compete with yield-bearing assets when rates are on the rise.