Forexpros – Copper futures rallied to a six-week high during European morning trade on Tuesday, as investors shrugged off concerns over the global economic outlook and focused on growing expectations for further monetary easing by central banks.
On the Comex division of the New York Mercantile Exchange, copper futures for September delivery traded at USD3.522 a pound during European morning trade, rallying 1.5%.
It earlier rose by as much as 2.2% to trade at USD3.548 a pound, the highest since May 15.
The U.S. Institute for Supply Management said Monday that its index of purchasing managers fell by 3.8 point to 49.7 in June from a reading of 53.5 in May, the first contraction since July 2009.
The data fuelled speculation that the Federal Reserve may implement a third round of quantitative easing, to shore up growth in the U.S. economy, which has been hit by the ongoing crisis in the euro zone.
In the euro zone, the final reading of the bloc’s manufacturing index came in at 45.1 in June, holding steady at its lowest level since June 2009.
Investors were looking ahead to the outcome of the European Central Bank’s monetary policy meeting on Thursday, amid growing expectations for a rate cut.
Meanwhile, in China, a government report showed that Chinese manufacturing activity grew at its slowest pace in seven months in June, as new export orders tumbled to lows hit in March 2009.
The China Securities Journal, a state-run newspaper, said the time is ripe for China to cut banks’ reserve requirements as slowing inflation gives more room for easing to stabilize growth.
China is the world’s largest copper consumer, accounting for almost 40% of world consumption last year.
A deeper slowdown in China, the world’s second-biggest economy, would impair a global expansion that is already faltering because of the euro zone’s debt crisis.
Elsewhere on the Comex, gold for August delivery climbed 0.7% to trade at USD1,609.05 a troy ounce, while silver for September delivery jumped 1.5% to trade at USD27.92 a troy ounce.
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