Forexpros – Copper futures were up for a second day on Thursday, as optimism Greece was moving closer to securing a debt swap deal with its private creditors boosted sentiment.
On the Comex division of the New York Mercantile Exchange, copper futures for May delivery traded at USD3.824 a pound during European morning trade, gaining 1.5%.
It earlier rose by as much as 1.65% to trade at a two-day high of USD3.828 a pound.
Market sentiment firmed up as prospects for a successful Greek deal rose after a group of major banks and funds said they would take part in the swap. As of late Wednesday, about 52% of the EUR206 billion bonds up for restructuring had been pledged.
The swap is vital for Greece to cut its debt and secure a bailout of EUR130 billion. Without the aid package, Greece could potentially default on its debt later this month.
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.
The news prompted investors to move in to riskier assets, such as stocks and commodities and shun the relative safety of the U.S. dollar.
The dollar index, which tracks the performance of the greenback against a basket of six other major currencies, was down 0.36% to trade at a two-day low of 79.44.
A weaker dollar boosts demand for raw materials as an alternative investment and makes dollar-priced commodities cheaper for holders of other currencies.
Prices received another boost from a report in the Wall Street Journal saying that the Federal Reserve was considering a new type of mortgage and Treasury bond-buying program, also known as quantitative easing, to help stimulate the U.S. economy.
BNP Paribas said in a report earlier that QE 2.5 or QE 3-lite “in the next two or three months is possible.”
Meanwhile, copper traders were awaiting the release of a flurry of Chinese economic data on Friday, which is likely to show further signs of cooling in the world’s second biggest economy.
Consumer prices were expected to rise 3.6% in February, slowing from 4.5% in January, giving Beijing more room to ease monetary policy to boost growth.
China is the world’s largest copper consumer, accounting for almost 40% of world consumption last year.
Elsewhere on the Comex, gold for April delivery jumped 1.1% to trade at USD1,702.55 a troy ounce, while silver for May delivery rallied 1.6% to trade at USD34.12 a troy ounce.
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