Forexpros – Copper futures trimmed gains on Tuesday to trade largely unchanged, as investors awaited further clues on the health of the global economy before pushing prices higher.
On the Comex division of the New York Mercantile Exchange, copper futures for May delivery traded at USD3.926 a pound during European morning trade, easing up 0.13%.
It earlier rose by as much as 1% to trade at USD3.955 a pound, the highest since February 29.
Copper prices rallied more than 2% on Monday, the biggest one-day gain since mid-February, after the U.S. Institute for Supply Management said its index of purchasing managers rose by 1.0 point to 53.4 in March.
The reading topped market expectations and kept the index above 50.0, indicating expansion in the sector.
But prices failed to break higher during early trade on Tuesday as investors sought further signs of improvement in the global economy before bidding risky assets higher.
Copper is regarded as a leading indicator of the global economy. It is used in the construction of buildings, power generation and transmission and the manufacture of consumer electronics.
The euro remained under pressure after data on Monday showed that manufacturing activity in the euro zone remained in contraction territory for the eight successive month in March, while a separate report showed that the bloc’s unemployment rate ticked up to a record high of 10.8% in February.
Official data released earlier Tuesday confirmed that the euro zone’s economy contracted by 0.3% in the final three months of 2011.
Europe as a region is second after China in global demand for the industrial metal and worries over its economic growth have kept copper prices under pressure in recent months.
Copper traders looked towards the release of U.S. government data on factory orders later in the day, while the Federal Reserve was to release the minutes of its most recent policy meeting.
On Friday, attention will turn to 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.
Trading was thin during the Asian session, with markets in mainland China shut for a three-day holiday. Trading will resume on Thursday.
China is the world’s largest copper consumer, accounting for almost 40% of world consumption last year.
Elsewhere on the Comex, gold for June delivery dipped 0.15% to trade at USD1,676.85 a troy ounce, while silver for May delivery fell 0.65% to trade at USD32.88 a troy ounce.
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