Forexpros – Copper futures pared gains on Tuesday, pulling back from a one-month high as investors locked in gains after prices notched their biggest two-day rally since January 2009, while uncertainty over the outcome of Wednesday’s key European Union summit meeting also weighed.
On the Comex division of the New York Mercantile Exchange, copper futures for December delivery traded at USD3.456 a pound during European morning trade, easing up 0.2%.
It earlier rose by as much as 1.2% to trade at USD3.538 a pound, the highest price since September 22.
Copper prices have rallied nearly 14% since last Friday, including a 7% jump on Monday as market sentiment was boosted after European leaders neared a deal over the weekend on bank recapitalization, while France and Germany seemed closer to an agreement on a potential enhancement of the euro zone’s bailout fund.
Data showing that manufacturing activity in the world’s largest copper consumer China rose to a five-month high in October provided further support for prices.
However, the rally prompted some investors to sell their position on profit taking and lock in gains, as traders remained cautious ahead of Wednesday’s critical EU summit, which markets hope will result in a viable solution to the euro zone’s debt crisis.
Prices remained supported amid speculation Chinese copper demand will remain strong in the near-term. Final trade data from China released overnight showed that refined copper imports rose 17% in September from a month earlier to hit a 16-month high of 275,499 tonnes.
Meanwhile, China’s Ministry of Human Resources and Social Security said earlier that the nation’s economy had the best third quarter of job creation in “several” years and new urban residential starts in the first nine months already exceeded the government’s full-year target.
Swiss lender UBS said in a report earlier that China was heading towards a “soft landing” and that copper consumption was expected to remain “very strong”.
China accounted for almost 40% of world copper consumption last year.
Elsewhere on the Comex, gold for December delivery rose 0.57% to trade at USD1,661.65 a troy ounce, while silver for December delivery jumped 0.94% to trade at USD31.94 a troy ounce.
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