Forexpros – Copper futures were higher during European morning hours on Tuesday, holding on to gains after data showed the euro zone’s economy contracted in line with expectations in the second quarter.
On the Comex division of the New York Mercantile Exchange, copper futures for September delivery traded at USD3.372 a pound during European morning trade, gaining 0.55%.
It earlier rose by as much as 0.85% to trade at a session high of USD3.380 a pound.
Eurostat said that the euro zone’s gross domestic product contracted by 0.2% in the three months to June, in line with expectations, after remaining flat in the preceding quarter.
On an annualized basis, the region’s gross domestic product contracted 0.4% in the second quarter, after contracting at a rate of 0.1% in the previous quarter.
A separate report from the ZEW Centre for Economic Research showed that German economic sentiment deteriorated for the fourth consecutive month in August, as concerns over the euro zone’s ongoing debt crisis continued to weigh.
Copper prices hit the highest levels of the session earlier in the day after data showed that Germany’s economy slowed less-than-expected in the second quarter.
Germany’s gross domestic product expanded by 0.3% in the three months to June, beating expectations for a 0.2% expansion and following an expansion of 0.5% in the first quarter.
A separate report showed that France’s economy stagnated in the second quarter, beating expectations for a 0.1% contraction and avoiding a recession.
Europe as a region is second in global demand for the industrial metal. Prices have tracked investor sentiment toward the euro zone’s debt crisis in recent months.
Market participants will now be watching U.S. data on retail sales and inflation later in the day in an attempt to assess the strength of the U.S. economic recovery and the need for further stimulus.
Copper prices have been drawing support from ongoing expectations that central banks in the U.S., Europe and China will soon announce fresh stimulus measures to help spur growth in their respective economies.
The industrial metal is sensitive to the global economic outlook because of its widespread uses in construction and manufacturing.
Elsewhere on the Comex, gold for October delivery eased up 0.3% to trade at USD1,615.65 a troy ounce, while silver for September delivery rose 0.5% to trade at USD27.90 a troy ounce.
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