Forexpros – Copper futures added to strong gains on Tuesday, rising to a six-day high after data showed that German economic sentiment improved to the highest level since June 2010, while investors awaited the outcome of a key meeting of Federal Reserve policymakers later in the day.
On the Comex division of the New York Mercantile Exchange, copper futures for May delivery traded at USD3.888 a pound during European morning trade, jumping 1.3%.
It earlier rose by as much as 1.5% to trade at USD3.895 a pound, the highest since March 5.
Copper prices extended gains after the ZEW Centre for Economic Research said that its index of German economic sentiment improved by 16.9 points to 22.3 in March, compared to February’s reading of 5.4.
Analysts had expected the index to improve by 5.1 points to 10.5 in March.
Meanwhile, economic sentiment in the euro zone turned positive for the first time in ten months, rising to 11.0 from a reading of minus 8.1 in February.
Futures were already higher ahead of the data after euro zone finance ministers indicated that Greece would receive formal approval for its second bailout early this week.
Head of the Eurogroup of finance ministers, Jean-Claude Juncker, said Monday there was “no doubt” that a second bailout for Greece, worth EUR130 billion, would be approved later in the week.
The Eurogroup meeting continues Tuesday, with ministers likely to discuss Spain’s debt situation, demanding it aim for a tougher deficit target this year in order to get back on target in 2013.
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.
Copper prices found further support after China’s central bank governor Zhou Xiaochuan said Beijing had room to ease lending curbs to support economic growth.
Official data released last week showed that Chinese consumer prices rose 3.2% in February from a year earlier, the slowest pace in 20 months.
The tame inflation data was seen as providing policy makers with more leeway to introduce fresh monetary easing measure to help prop up the economy.
China is the world’s largest copper consumer, accounting for almost 40% of world consumption last year.
Meanwhile, traders were awaiting the outcome of a Federal Reserve policy meeting later in the day.
The meeting comes after Friday’s robust U.S. employment data, which showed that the U.S. economy added 227,000 jobs in February, beating expectations for a 210,000 gain.
The upbeat data diminished expectations for a fresh round of asset purchases by the Federal Reserve to help stimulate economic growth.
However, the Wall Street Journal reported last week that the Fed is considering a strategy that would allow it to undertake another round of bond buying, while lowering the risk of inflation.
Elsewhere on the Comex, gold for April delivery shed 0.2% to trade at USD1,696.05 a troy ounce, while silver for May delivery rose 0.3% to trade at USD33.51 a troy ounce.
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