Forexpros – Copper futures were up sharply on Monday, rallying to a three-day high after a well-received Italian bond auction eased fears over the country’s debt crisis.
On the Comex division of the New York Mercantile Exchange, copper futures for December delivery traded at USD3.530 a pound during European morning trade, surging 1.94%.
It earlier rose by as much as 2.65% to trade at USD3.585 a pound, the highest price since November 9.
Italy’s Treasury auctioned EUR3 billion of five-year government bonds at an average yield of 6.29% earlier in the day, compared to a yield of 5.32% in a previous sale last month, but still below the level seen in the secondary market of 6.35% ahead of the sale.
The auction, which was viewed as a key test of investor confidence in Italian debt, was the first after former European Commissioner Mario Monti was appointed to head a new government charged with implementing urgent reforms.
Meanwhile, Greek Finance Minister Evangelos Venizelos said his priority was to ensure the country receives its sixth tranche of bailout funds after Prime Minister Lucas Papademos was sworn in.
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.
Copper prices found further support after Zhu Min, deputy managing director at the International Monetary Fund said over the weekend that China’s economy was heading towards a “soft landing”.
U.K. financial service provider Barclays said in a report earlier that, “It looks like China is managing to engineer a soft landing, but if we begin to see some of the data disappoint, then that will be the real risk to base metals prices because the market isn’t pricing that in.”
China is the world’s largest copper user, accounting for approximately 40% of world copper consumption last year.
Preliminary data showing that Japan’s economy grew by 1.5% in the third quarter also supported copper prices. The gain comes after three quarters of contraction, and indicates an annualized rate of growth of 6.0%.
Elsewhere on the Comex, gold for December delivery shed 0.4% to trade at USD1,781.15 a troy ounce, while silver for December delivery slumped 0.71% to trade at USD34.43 a troy ounce.
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