Forexpros – Copper futures extended gains during European morning trade on Tuesday, climbing to the highest levels of the session following mostly successful bond auctions from the Netherlands and Spain.
On the Comex division of the New York Mercantile Exchange, copper futures for July delivery traded at USD3.671 a pound during European morning trade, climbing 1%.
It earlier rose by as much as 1.15% to trade at a session high of USD3.677 a pound. Prices slumped to USD3.612 on Monday.
Concerns over the euro zone’s debt crisis eased somewhat after the Dutch State Treasury Agency sold EUR1.995 billion worth of bonds maturing in 2014 and 2037 earlier in the day. The country had aimed to raise between EUR1.5 billion and EUR2.5 billion.
The Netherlands auctioned EUR1.0 billion worth of two-year government bonds at an average yield of 0.523%, lower than at a similar auction last month. In addition, the country sold EUR0.995 billion in 25-year bonds at an average yield of 2.782%
The bond auction was seen as key test of investor confidence in the country’s debt after Dutch Prime Minister Mark Rutte on Monday tendered his government’s resignation in a crisis over budget cuts, creating a political vacuum in one of the region’s most stable nations.
Overnight, Moody’s warned that the crisis was “credit negative”, but said it was maintaining its current rating of AAA with a stable outlook. Fellow agency Fitch warned last week it was on verge of taking negative action on the rating.
Also Tuesday, Spain’s Treasury sold EUR1.9 billion worth of three- and six-month debt earlier, just below the maximum target of EUR2 billion.
The debt-laden country auctioned 0.72 billion in three-month bonds at an average yield of 0.634%, up from 0.381% at a similar auction last month. The country also sold EUR1.21 billion of six-month debt at an average yield of 1.580%, up sharply from 0.836% last month.
Bond auctions have become key drivers of risk sentiment in recent months, as traders attempt to gauge the ability of indebted euro zone nations to fund themselves.
Europe as a region is second in global demand for the industrial metal. Prices have tracked investor sentiment toward the euro zone’s debt crisis in recent months.
Investors are now eyeing the Federal Reserve’s two-day policy meeting that begins later in the day to gauge the central bank’s attitude towards further monetary stimulus.
Elsewhere on the Comex, gold for June delivery added 0.3% to trade at USD1,637.25 a troy ounce, while silver for July delivery rose 0.8% to trade at USD30.84 a troy ounce.
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