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Copper bounces off 2-month low ahead of U.S. vote, China Congress

Published 11/06/2012, 04:42 AM
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Investing.com - Copper futures edged up from a two-month low during European morning hours on Tuesday, as investors looked ahead to the U.S. presidential election and a leadership change in China.

On the Comex division of the New York Mercantile Exchange, copper futures for December delivery traded at USD3.482 a pound during European morning trade, adding 0.35%.

Earlier in the day, prices rose by as much as 0.75% to hit a session high of USD3.497 a pound. Copper futures fell to a two-month low of USD3.448 a pound on Monday.

Market participants stayed on the sidelines ahead of the start of voting in the U.S. presidential elections, with opinion polls pointing to a tight race between incumbent President Barack Obama and Republican contender Mitt Romney.

If the election comes down to a thin margin in a swing state such as Ohio, the outcome could be delayed for days or weeks, roiling markets as it did during the extended presidential battle in 2000.

Traders will be keeping a close eye on congressional races as well, amid concerns over how lawmakers may deal with the looming U.S. “fiscal cliff”, approximately USD600 billion in tax hikes and spending cuts due to come into effect on January 1.

Investors are also eyeing the start of the Chinese Communist Party Congress on Thursday, where a once-in-a-decade leadership change is to take place.

Copper traders also were looking ahead to Friday, when China releases a slew of economic data, including retail sales, industrial production and the country's consumer and producer price indexes.

The Asian nation is the world’s largest copper consumer, accounting for almost 40% of world consumption last year.

Greece remained on investors’ mind, as the country’s parliament prepared to vote on the latest rounds of austerity measures on Wednesday, which could determine if Athens receives its next tranche of financial aid.

Elsewhere on the Comex, gold for December delivery added 0.3% to trade at USD1,688.75 a troy ounce, while silver for December delivery rose 0.5% to trade at USD31.28 a troy ounce.

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