Forexpros – Copper futures trimmed losses on Wednesday, bouncing off a four-day low as a drop in Italian and Spanish bond yields helped boost market sentiment.
On the Comex division of the New York Mercantile Exchange, copper futures for December delivery traded at USD3.473 a pound during European morning trade, shedding 0.8%.
It earlier tumbled by as much as 1.9% to trade at USD3.431 a pound, the lowest price since November 11.
Copper futures came off their lows after Italian government borrowing costs eased back below the 7% threshold, a level widely viewed as unsustainable in the long term. The yield on the nation’s 10-year bond fell to 6.75%, well off Tuesday’s high of 7.25%.
Later Wednesday, incoming Italian Prime Minister Mario Monti was due to meet with President Giorgio Napolitano to officially accept the post and present his new government.
Spanish yields also declined, falling to 6.22% from Tuesday’s three-month high of 6.34%, amid speculation the ECB was purchasing bonds in the secondary market.
The U.S. dollar moderated gains against its major counterparts, with the greenback pulling back from a five-week high against the euro.
The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, was up 0.07% to trade at 78.16, after being up by as much as 0.62% earlier.
Mounting fears over potential sovereign debt contagion in core euro zone economies weighed on copper prices during the Asian trading session.
Meanwhile, union workers at Freeport McMoran’s Grasberg mine in Indonesia extended their strike into a third month, a union representative said on Tuesday.
Wall Street lender Citigroup said in a report late Tuesday that the Freeport supply loss was “limiting price weakness for copper, despite expectations of weaker global demand.”
Grasberg is one of the world’s largest copper mines. In 2010, Freeport sold 1.2 billion pounds of copper from Grasberg.
Elsewhere on the Comex, gold for December delivery dropped 0.45% to trade at USD1,774.25 a troy ounce, while silver for December delivery eased down 0.05% to trade at USD34.44 a troy ounce.
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