Forexpros – Copper futures rallied for a third day on Wednesday, trading at the highest level since mid-December as prices continued to draw support from expectations of monetary easing in China, while markets monitored developments surrounding the euro zone’s debt crisis.
On the Comex division of the New York Mercantile Exchange, copper futures for March delivery traded at USD3.541 a pound during European morning trade, gaining 0.8%.
It earlier rose by as much as 1.1% to trade at USD3.552 a pound, the highest since December 12.
Sentiment on the industrial metal remained upbeat amid ongoing expectations that China will ease its monetary policy in the near-term and provide further stimulus measures to prop up the world’s second largest economy.
Data on Tuesday showed that China’s copper imports in December surged to a record high, as purchases were boosted by lower prices and pre-Lunar New Year holiday stockpiling.
Inbound copper shipments totaled 508,942 metric tons in December, gaining for the seventh consecutive month. The figure was nearly 13% higher than copper imports in the previous month, brightening the demand outlook for the industrial metal.
Copper traders were awaiting the release of key Chinese inflation figures on Thursday, which was likely to show further signs of cooling.
Wall Street investment bank Goldman Sachs said in a report earlier that it expected Beijing to reduce the amount banks have to keep in reserve in the first half of the year, while any cut in interest rates would likely happen in the second half.
China is the world’s largest copper consumer, accounting for almost 40% of world consumption last year.
Meanwhile, investors remained jittery ahead of Spanish and Italian government debt auctions on Thursday and Friday respectively.
Later in the day, German Chancellor Angela Merkel and Italian Prime Minister Mario Monti were to meet in Berlin, while International Monetary Fund Chief Christine Lagarde was to meet French President Nicolas Sarkozy in Paris.
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.
Elsewhere on the Comex, gold for February delivery rose 0.85% to trade at USD1,645.75 a troy ounce, while silver for March delivery jumped 1.25% to trade at USD30.18 a troy ounce.
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