Copper price kicks on China manufacturing data
Copper rose by more than two per cent on Monday after US and Chinese manufacturing data boosted demand prospects and was also supported by a backdrop of increasing market tightness.
Copper for three-months delivery on the London Metal Exchange closed at $US8300 a tonne, versus a close of $US8199 on Friday, when caution about the scale and scope of US monetary easing drove it to a three-week low.
The red metal hit a high for the day of $US8376.50 a tonne after data showed the pace of growth in the US manufacturing sector quickened unexpectedly in October, raising investors' hopes the US economic recovery could be gathering pace. As well data from China raised hopes of greater demand for copper.
The Manufacturing PMI of China rose to 54.7 in October, more than the forecast of 53.5. In the earlier month of September, the index had reported figures of 53.8. Moreover, weakness in the DX also helped the red metal prices to gain today.
Copper inventories dropped by 925 tonnes to reach 367,575 tonnes on the LME warehouse today. On the MCX, copper prices gained sharply around 1% and were hovering at `372.65/kg today.
But the copper price lost some power as the dollar turned positive against a basket of currencies after the US manufacturing data.
Spot gold prices gained around 0.3% and were hovering around $1363.70 per ounce. Despite positive sentiments in the equity markets, the yellow metal prices experienced gains mainly on the back of weakness in the US Dollar.
Silver, another precious metal with industrial uses, also rose, gaining 1.3 per cent to a new 30-year high of $25.03 an ounce.
In a rebuttal of Barack Obama's administration, the benchmark S&P 500 index had risen 12.9 percent since the start of September on hopes for Republican gains in Tuesday's elections and a Federal Reserve announcement of monetary easing on Wednesday. Since then investors have stayed on the sidelines with trading volume extremely light.
The Dow Jones industrial average was up 6.13 points, or 0.06 percent, at 11,124.62. The Standard & Poor's 500 Index was up 1.12 points, or 0.09 percent, at 1,184.38. The Nasdaq Composite Index was down 2.57 points, or 0.10 percent, at 2,504.84.
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