Forexpros – Copper futures jumped to a four-day on Thursday, as hopes that euro zone policy makers will take action to tackle the region’s debt crisis boosted appetite for riskier assets ahead of a key European Central Bank policy meeting later in the day.
On the Comex division of the New York Mercantile Exchange, copper futures for December delivery traded at USD3.231 a pound during European morning trade, surging 4%.
It earlier rose by as much as 4.55% to trade at USD3.252 a pound, the highest price since September 30.
Market sentiment was boosted after European Commission President Jose Manuel Barroso said that EU officials were proposing coordinated action to recapitalize the region’s banks.
The move is intended to help banks “get rid of toxic assets they may have,” Barroso said.
The comments came after the Financial Times reported that European bank regulators will conduct a new round of evaluations on regional banks, in an attempt to avert a shock to the region’s financial system if Greece defaults.
Commodity traders were awaiting the outcome of the European Central Bank’s policy meeting later in the day, at which the bank was widely expected to leave rates unchanged at 1.5%.
The rate decision will be followed by a closely-watched press conference by ECB President Jean-Claude Trichet, who will be heading his final interest rate meeting as ECB chief.
Weakness in the U.S. dollar also contributed to gains, as the dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, was down 0.12% to trade at 79.33.
A weaker dollar boosts demand for raw materials as an alternative investment and makes metals priced in the currency cheaper for holders of other currencies.
Some mild bargain buying also lent support, after copper prices plunged to a 14-month low of USD2.998 a pound earlier in the week amid fears over a slowdown in global demand for the industrial metal.
Elsewhere on the Comex, gold for December delivery climbed 0.64% to trade at USD1,652.05 a troy ounce, while silver for December delivery rallied 3.14% to trade at USD31.29 a troy ounce.
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