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Copper futures trade at 10-week high amid China optimism

By Investing.com  |  Commodities News  |  Aug 12, 2013 09:29AM GMT  |   Add a Comment
 
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Investing.com - Copper futures traded at the highest level since June on Monday, amid hopes policy makers in Beijing will introduce fresh stimulus measures to boost growth in the world’s second largest economy.

Copper futures trade at 10-week high amid China optimism
Gains were limited as ongoing uncertainty over the future of the Federal Reserve's stimulus program continued to weigh.

On the Comex division of the New York Mercantile Exchange, copper futures for September delivery traded at USD3.308 a pound during European morning trade, up 0.1%.

Nymex copper prices hit a session high of USD3.329 a pound earlier, the strongest level since June 7.

Copper prices were likely to find support at USD3.174 a pound, the low from August 8 and near-term resistance at USD3.342 a pound, the high from June 7.

The September contract settled up 1.1% at USD3.306 a pound on Friday after upbeat economic data out of China alleviated fears over a slowdown in the world’s second largest economy.

Official data showed that Chinese industrial output rose significantly more-than-forecast in July, while consumer price inflation remained unchanged.

Market sentiment received a further boost after Hong Kong daily newspaper South China Morning Post reported earlier that Beijing was “quietly offering financial stimulus” to key cities and provinces to support economic growth.

China is the world’s largest copper consumer, accounting for almost 40% of world consumption last year.

Copper traders were looking ahead to Tuesday’s U.S. retail sales report, as well as speeches by senior Federal Reserve officials later in the week, amid ongoing speculation over how soon the Fed may start to pull back its asset purchase program.

Investors have closely been looking out for U.S. data reports recently to gauge if they will strengthen or weaken the case for the Fed to reduce its bond purchases.

Any improvement in the U.S. economy was likely to reinforce the view that the central bank will begin to taper its bond purchase program in the coming months.

The Fed’s stimulus program is viewed by many investors as a key driver in boosting the price of commodities as it tends to depress the value of the dollar.

Elsewhere on the Comex, gold for December delivery added 1.1% to trade at USD1,326.20 a troy ounce, while silver for September delivery soared 2.65% to trade at USD20.94 a troy ounce.

Moves in the gold and silver price this year have largely tracked shifting expectations as to whether the U.S. central bank would end its bond-buying program sooner-than-expected.


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