Forexpros – Copper futures regained strength on Thursday, rebounding from the lowest level in three weeks after Spain saw borrowing costs fall at a well-received bond auction, but gains were limited amid the uncertain global economic outlook.
On the Comex division of the New York Mercantile Exchange, copper futures for March delivery traded at USD3.292 a pound during European morning trade, gaining 0.42%.
It earlier rose by as much as 0.6% to trade at a daily high of USD3.307 a pound.
Copper prices plunged nearly 5% on Wednesday, falling to a three-week low, as lingering concerns over a possible mass downgrade in the euro zone prompted investors to shun riskier assets.
But prices found support after Spain’s Treasury sold EUR6 billion of medium-and-long-term bonds earlier in the day, far surpassing a target of EUR3.5 billion.
The country sold EUR2.5 billion of five-year bonds at an average yield of 4.02%, down sharply from 5.27% at a similar auction last month. Spain also auction EUR1.4 billion in ten-year bonds at a yield of 5.54%, compared to 6.97% at a November bond sale.
Europe as a region is second in global demand for the industrial metal and worries over its economic growth have kept copper prices under pressure in recent weeks.
However, gains were limited after a preliminary reading of HSBC’s China purchasing managers’ index showed manufacturing activity contracted for the second consecutive month in December, adding to concerns over an economic ‘hard landing’.
China is the world’s largest copper consumer, accounting for almost 40% of world consumption last year.
Data showing that manufacturing activity in the euro zone contracted for the fourth consecutive month in December also weighed. A separate report showed that manufacturing activity in Germany rebounded from the previous month’s 28-month low, but remained in contraction territory for the third consecutive month.
Copper is sensitive to manufacturing numbers because of its widespread uses across industries.
Elsewhere on the Comex, gold for February delivery edged 0.25% higher to trade at USD1,591.15 a troy ounce, while silver for March delivery added 0.35% to trade at USD29.03 a troy ounce.
Forexpros
