Forexpros – Copper futures were higher during European morning hours on Thursday, holding on to gains after Spain saw medium-term borrowing costs jump at a government debt auction earlier in the day.
The industrial metal remained supported amid ongoing expectations policy makers in China will increase efforts to boost growth in the world’s largest copper.
On the Comex division of the New York Mercantile Exchange, copper futures for September delivery traded at USD3.500 a pound during European morning trade, gaining 0.75%.
It earlier rose by as much as 0.9% to trade at a session high of USD3.504 a pound.
Spain’s Treasury auctioned EUR2.9 billion of two, five and seven-year government bonds earlier in the day.
The debt-laden country saw yields on the country’s five-year bonds climb to 6.45% from 6.07% at a similar auction last month, while the yield on the seven year bond jumped to 6.79% from 4.89% in February.
Following the auction, the yield on the country’s 10-year bonds was at 7.02%, breaching the critical 7% threshold, widely viewed as unsustainable in the long run.
Meanwhile, investors mulled over a second day of testimony on the U.S. economy and monetary policy by Federal Reserve Chairman Ben Bernanke on Wednesday.
Bernanke reiterated that the U.S. central bank was prepared to take further action to support the economic recovery if necessary. However, he failed to indicate whether the Fed will embark on a third round of quantitative easing.
Market participants looked ahead to a raft of U.S. data later in the day, to gauge the strength of the U.S. economic recovery.
The world’s largest economy was to publish government data on initial jobless claims, as well as reports on existing home sales and manufacturing activity in Philadelphia.
On Wednesday, official data showed that U.S. housing starts hit their highest level since October 2008 last month.
Hopes for additional stimulus measures from China continued to support copper prices.
There are expectations in the market that China will cut its banks’ reserve requirement ratio to boost lending and support growth in the world’s largest copper consumer.
China is the world’s largest copper consumer, accounting for almost 40% of world consumption last year.
Elsewhere on the Comex, gold for August delivery rose 0.6% to trade at USD1,579.95 a troy ounce, while silver for September delivery advanced 0.7% to trade at USD27.28 a troy ounce.
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