Forexpros – Copper futures rallied on to a three-day high on Monday, after European leaders indicated progress on resolving the region’s ongoing debt crisis and as data pointed to an improvement in Chinese manufacturing.
On the Comex division of the New York Mercantile Exchange, copper futures for December delivery traded at USD3.361 a pound during European morning trade, surging 4.28%.
It earlier rose by as much as 4.4% to trade at USD3.367 a pound, the highest price since October 19.
At the conclusion of a series of weekend meetings in Brussels by European leaders on Sunday, German Chancellor Angela Merkel and French President Nicolas Sarkozy said that a broad agreement is taking shape in resolving the euro zone’s debt woes.
The plan includes measures to recapitalize European lenders, to restructure Greece’s sovereign debt and to boost the powers of the euro zone’s bailout fund, the European Financial Stability Facility.
A comprehensive response to the two-year old sovereign-debt crisis was expected to be unveiled at a follow-up meeting of EU policy makers on Wednesday.
Copper prices found further support after a preliminary reading of the HSBC China purchasing managers’ index rose to a five-month high of 51.1 in October.
The index moved into expansion territory for the first time in four months, easing concerns over a slowdown in demand from the world’s largest copper consumer.
Copper futures briefly pared gains following the release of data showing that manufacturing activity in the euro zone slumped to a 27-month low in October, while a separate report said that manufacturing output in Germany also dropped to a 27-month low.
Meanwhile, copper prices were supported by an ongoing strike at Freeport McMoran Copper & Gold’s Grasberg mine in Indonesia, which is the world’s second largest.
Elsewhere on the Comex, gold for December delivery climbed 1.18% to trade at USD1,655.35 a troy ounce, while silver for December delivery jumped 1.44% to trade at USD31.64 a troy ounce.
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