Investing.com - Copper prices edged higher on Tuesday, but remained near the previous session's six-year low as investors continued to monitor movements on China's volatile stock market.
Copper for September delivery on the Comex division of the New York Mercantile Exchange tacked on 1.4 cents, or 0.59%, to trade at $2.368 a pound during European morning hours.
A day earlier, copper tumbled to $2.336, a level not seen since June 2009, before ending at $2.353, down 2.9 cents, or 1.22%.
The Shanghai Composite took investors on a roller coaster ride on Tuesday, plunging nearly 5% after the open, only to rebound into positive territory ahead of the midday break, and then drop again in afternoon trade to end down 1.7%.
The People's Bank of China said in a statement before the market opened Tuesday it would act to stabilize market expectations.
On Monday, the Shanghai Composite tumbled 8.5%, the biggest one-day drop since February 2007, amid reports that government buying of stocks and securities has slowed.
Equity markets in China plunged sharply earlier this month, forcing policymakers to intervene and provide measures to boost liquidity and calm investors.
Market players are concerned that the plunge in the stock market could spread to other parts of the Chinese economy, triggering fears that the Asian nation's demand for the industrial metal will decline.
China is the world’s largest copper consumer, accounting for almost 40% of world consumption last year.
Elsewhere, gold futures for December delivery shed $1.50, or 0.14%, to trade at $1,095.40 a troy ounce, while silver futures for September delivery dipped 1.5 cents, or 0.1% to trade at $14.59 an ounce.
Investors were looking ahead to the Federal Reserve’s monetary policy statement on Wednesday for any fresh indications on when it may start to hike interest rates.
Gold has been under heavy selling pressure in recent months amid speculation the Federal Reserve will raise interest rates for the first time in nine years as soon as September.
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.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was up 0.18% to 96.80 early on Tuesday, moving off Monday's lows of 96.36.
The dollar has been boosted in recent weeks by mounting expectations that the U.S. central bank could raise rates as soon as September if the economy continues to improve as expected.
Meanwhile, formal talks between Greece and its international creditors on a new bailout package are underway.
A new agreement must be reached before August 20 when Greece must repay more than €3 billion to the European Central Bank.