Investing.com - Copper futures rallied sharply on Tuesday, bouncing off the lowest level since July 2010 after China’s central bank sought to reassure investors that liquidity would be kept at an appropriate level to support growth.
On the Comex division of the New York Mercantile Exchange, copper futures for September delivery traded at USD3.058 a pound during European morning trade, up 1% on the day.
New York-traded copper prices fell by as much as 1.4% earlier in the session to hit a daily low of USD2.986 a pound, the weakest level since July 20, 2010, amid growing fears over a cash crunch in the Chinese financial system.
But prices recovered after Ling Tao, a deputy director of the Shanghai branch of the People’s Bank of China, said that the central bank will guide interest rates to a “reasonable range”.
Tao also said that interbank liquidity overall is abundant and risk is largely under control.
The central bank will continue to closely monitor liquidity changes and will make an effort to stabilize market expectations, he added.
China is the world’s largest copper consumer, accounting for almost 40% of world consumption last year.
Copper found additional support after Federal Reserve officials played down fears over an imminent end to the central bank’s stimulus program.
On Monday, Narayana Kocherlakota, president of the Federal Reserve Bank of Minneapolis, said the central bank was committed to continuing its bond purchase program until the U.S. unemployment rate falls further.
Dallas Fed President Richard Fisher also downplayed market jitters over tapering as overdone.
Prices of the industrial metal have been under heavy selling pressure in recent sessions as a combination of concerns over a deepening slowdown in China and fears over an end to the Federal Reserve’s asset purchase program weighed.
Elsewhere on the Comex, gold for August delivery rose 0.6% to trade at USD1,284.45 a troy ounce, while silver for September delivery jumped 1.1% to trade at USD19.74 a troy ounce.
On the Comex division of the New York Mercantile Exchange, copper futures for September delivery traded at USD3.058 a pound during European morning trade, up 1% on the day.
New York-traded copper prices fell by as much as 1.4% earlier in the session to hit a daily low of USD2.986 a pound, the weakest level since July 20, 2010, amid growing fears over a cash crunch in the Chinese financial system.
But prices recovered after Ling Tao, a deputy director of the Shanghai branch of the People’s Bank of China, said that the central bank will guide interest rates to a “reasonable range”.
Tao also said that interbank liquidity overall is abundant and risk is largely under control.
The central bank will continue to closely monitor liquidity changes and will make an effort to stabilize market expectations, he added.
China is the world’s largest copper consumer, accounting for almost 40% of world consumption last year.
Copper found additional support after Federal Reserve officials played down fears over an imminent end to the central bank’s stimulus program.
On Monday, Narayana Kocherlakota, president of the Federal Reserve Bank of Minneapolis, said the central bank was committed to continuing its bond purchase program until the U.S. unemployment rate falls further.
Dallas Fed President Richard Fisher also downplayed market jitters over tapering as overdone.
Prices of the industrial metal have been under heavy selling pressure in recent sessions as a combination of concerns over a deepening slowdown in China and fears over an end to the Federal Reserve’s asset purchase program weighed.
Elsewhere on the Comex, gold for August delivery rose 0.6% to trade at USD1,284.45 a troy ounce, while silver for September delivery jumped 1.1% to trade at USD19.74 a troy ounce.