Forexpros – Copper futures rebounded from a two-day low on Tuesday, as prices were boosted by a broadly weaker U.S. dollar, however ongoing concerns over the sovereign debt crisis in the euro zone and a slowdown in demand from top consumer China limited gains.
On the Comex division of the New York Mercantile Exchange, copper futures for March delivery traded at USD3.339 a pound during European morning trade, gaining 0.9%.
It earlier rose by as much as 1.05% to trade at a daily high of USD3.344 a pound.
Copper’s gains came as the dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, declined 0.6% to trade at 80.42.
A weaker dollar boosts demand for raw materials as an alternative investment and makes dollar-priced commodities cheaper for holders of other currencies.
The euro found support after a report from German research institute, Ifo, showed that German business confidence improved unexpectedly in December.
Meanwhile, European Union finance ministers agreed on Monday to provide EUR150 billion in loans to the International Monetary Fund, below the EUR200 billion initially agreed upon at an EU summit earlier in the month.
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 weeks.
Sentiment on the industrial metal was dampened after China’s Nonferrous Metals Industry Association said that metal demand in the world’s second largest economy was forecast to grow at a slower pace in 2012, while adding that industrial metal prices were likely to be lower next year.
“It is unlikely to see metals demand to grow at more than 10% next year, given the uncertain macroeconomic environment,” Wang Huajun, deputy secretary-general of the CNMIA said at an industry event in Shanghai earlier n the day.
China is the world’s largest copper consumer, accounting for almost 40% of world consumption last year. Imports of the industrial metal are down9.7% from a year earlier through November.
Elsewhere on the Comex, gold for February delivery rose 0.7% to trade at USD1,608.15 a troy ounce, while silver for March delivery rallied 1.25% to trade at USD29.23 a troy ounce.
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