Investing.com - Copper futures rose sharply on Monday, as a broadly weaker U.S. dollar and fresh hopes that European policymakers will reach an agreement to contain the region’s debt crisis boosted demand for riskier assets.
On the Comex division of the New York Mercantile Exchange, copper futures for March delivery traded at USD3.386 a pound during European morning trade, rallying 3.1%.
It earlier rose by as much as 3.35% to trade at USD3.397 a pound, the highest price since November 18.
Market sentiment strengthened amid reports that German Chancellor Angela Merkel and French President Nicolas Sarkozy were studying legal changes to the European Union treaty, which would include deeper financial integration among EU members.
The pact, if agreed, would also give the European Central Bank more scope to undertake large scale bond purchases.
The news boosted appetite for riskier assets, such as stocks and commodities and prompted investors to shun the U.S. dollar.
The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, retreated 0.94% to trade at 79.08. A weaker dollar boosts demand for raw materials as an alternative investment and makes dollar-priced commodities cheaper for holders of other currencies.
Copper futures held on to gains after a spokesman for the International Monetary Fund dismissed speculation that the lending organization was preparing a EUR600 bailout package for Italy.
Europe as a region is second after China in global demand for the industrial metal and worries over its debt crisis have kept copper prices under pressure in recent weeks.
Tom Albanese, chief executive of global mining giant Rio Tinto said earlier that “continuing stresses in the euro zone and a weaker outlook for the U.S. economy are inevitably affecting customer sentiment, which has become more negative in recent months."
Albanese added that while there are signs of nervousness, “we believe the impact of current economic concerns on our business is manageable, unless financial markets substantially deteriorate." Rio Tinto is the world’s fourth largest copper producer.
Elsewhere on the Comex, gold for February delivery surged 1.9% to trade at USD1,720.45 a troy ounce, while silver for March delivery rallied 3.6% to trade at USD32.21 a troy ounce.
On the Comex division of the New York Mercantile Exchange, copper futures for March delivery traded at USD3.386 a pound during European morning trade, rallying 3.1%.
It earlier rose by as much as 3.35% to trade at USD3.397 a pound, the highest price since November 18.
Market sentiment strengthened amid reports that German Chancellor Angela Merkel and French President Nicolas Sarkozy were studying legal changes to the European Union treaty, which would include deeper financial integration among EU members.
The pact, if agreed, would also give the European Central Bank more scope to undertake large scale bond purchases.
The news boosted appetite for riskier assets, such as stocks and commodities and prompted investors to shun the U.S. dollar.
The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, retreated 0.94% to trade at 79.08. A weaker dollar boosts demand for raw materials as an alternative investment and makes dollar-priced commodities cheaper for holders of other currencies.
Copper futures held on to gains after a spokesman for the International Monetary Fund dismissed speculation that the lending organization was preparing a EUR600 bailout package for Italy.
Europe as a region is second after China in global demand for the industrial metal and worries over its debt crisis have kept copper prices under pressure in recent weeks.
Tom Albanese, chief executive of global mining giant Rio Tinto said earlier that “continuing stresses in the euro zone and a weaker outlook for the U.S. economy are inevitably affecting customer sentiment, which has become more negative in recent months."
Albanese added that while there are signs of nervousness, “we believe the impact of current economic concerns on our business is manageable, unless financial markets substantially deteriorate." Rio Tinto is the world’s fourth largest copper producer.
Elsewhere on the Comex, gold for February delivery surged 1.9% to trade at USD1,720.45 a troy ounce, while silver for March delivery rallied 3.6% to trade at USD32.21 a troy ounce.