Forexpros – Copper futures edged modestly higher on Thursday, halting two days of steep declines sparked by renewed concerns over the euro zone’s debt crisis and fading hopes for a third round of monetary easing in the U.S.
On the Comex division of the New York Mercantile Exchange, copper futures for May delivery traded at USD3.800 a pound during European morning trade, adding 0.26%.
It earlier rose by as much as 0.5% to trade at a session high of USD3.813 a pound. Copper futures fell to USD3.779 a pound late Wednesday, the lowest since March 29.
Trading is expected to be quiet ahead of the Easter holiday. Markets in the U.S. and Europe will remain closed on Friday in observance of Good Friday. Most markets in Europe will be shut next Monday as well.
Copper prices plunged nearly 4% in the two sessions leading up to Thursday, as markets were spooked by a dismal Spanish bond auction, which sparked concerns over the health of the euro zone’s fourth largest economy.
Also Wednesday, European Central Bank President Mario Draghi warned of downside risks to euro zone growth prospects after the central bank kept policy unchanged at its monthly meeting.
Europe as a region is second in global demand for the industrial metal and worries over its economic growth have kept copper prices under pressure in recent weeks.
The renewed euro zone concerns further undermined appetite for riskier assets, which already took a hit after minutes from the March meeting of the Federal Reserve’s Open Market Committee released Tuesday indicated that the central bank was unlikely to introduce more stimulus measures to help boost the U.S. economy in the near term.
Attention now shifts to Friday’s U.S. non-farm payrolls data, which could shed further light on the strength of the U.S. economy and the need for further monetary easing in the U.S.
Copper prices found support after a private sector survey of purchasing managers showed that China’s services sector expanded in March and business confidence hit an 11-month high.
China is the world’s largest copper consumer, accounting for almost 40% of world consumption last year. Market players have been searching for clues in regards to Chinese growth prospects amid fears the country is headed towards a ‘hard landing’.
On Wednesday, Zhang Xiaoqiang, vice minister of China’s National Development & Reform Commission said that the Asian nation’s economy was set to grow 8.4% in the first quarter from a year earlier.
Xiaoqiang, who said the figures were preliminary and based on research, added that consumer prices for the quarter likely rose about 3.5%.
China is set to release official statistics on the size of its economy on April 13, and on consumer prices April 9.
Elsewhere on the Comex, gold for June delivery rose 0.7% to trade at USD1,625.55 a troy ounce, while silver for May delivery climbed 1.15% to trade at USD31.40 a troy ounce.
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