Investing.com - Copper futures rose to a four-day high during European morning trade on Monday, after opinion polls in Greece showed conservative parties hold the lead in next month’s national elections, while growing fears over Spain’s deteriorating financial situation capped gains.
On the Comex division of the New York Mercantile Exchange, copper futures for July delivery traded at USD3.488 a pound during European morning trade, jumping 1.15%.
It earlier rose by as much as 1.4% to trade at USD3.496 a pound, the highest since May 22. Prices touched USD3.386 a pound on May 23, the lowest since January 10.
Market sentiment firmed after weekend opinion polls in Greece indicated that pro-bailout party New Democracy was leading the polls ahead of a general election next month.
The likelihood of Greece leaving the euro has been growing since early May, when anti-bailout political parties deprived pro-austerity parties of a majority at the polls.
The euro inched up from last week’s 22-month low against the U.S. dollar, while the dollar index, which tracks the performance of the greenback against a basket of six other major currencies, was down 0.5% to trade at 82.10.
On Friday, the index hit the highest level since September 2010.
Despite the relief rally, copper prices remained vulnerable to further losses amid growing concerns over the fiscal health of Spain.
Ratings agency Standard & Poor’s cut the ratings on five Spanish banks on Friday and said it believes the country is entering a double-dip recession.
Adding to the gloomy environment, the president of Catalonia, Spain's wealthiest autonomous region, said on Friday it had few options to refinance over EUR13 billion in debt due this year.
Furthermore, a government source said on Sunday that Spain may recapitalize its fourth-largest bank, Bankia, which last week asked for EUR19 billion in funding.
The fears pushed up yields on Spanish 10-year government bonds to above 6.5%, the highest level since November of last year.
Europe as a region is second in global demand for the industrial metal. Prices have tracked investor sentiment toward the euro zone’s debt crisis in recent months.
Meanwhile, hopes for fresh monetary easing by China to prop up growth in the world’s second largest economy provided further support after Beijing pledged to speed up approvals for new infrastructure-related projects last week.
China is the world’s largest copper consumer, accounting for almost 40% of world consumption last year. Fears over a slowdown in copper demand from the Asian nation have been weighing on prices lately.
Copper is sensitive to the global economic growth outlook because of its widespread uses across industries.
Elsewhere on the Comex, gold for August delivery rose 0.7% to trade at USD1,582.25 a troy ounce, while silver for July delivery gained 0.85% to trade at USD28.62 a troy ounce.
Trading is expected to be subdued on Monday amid a lack of key economic data and a U.S. market holiday for Memorial Day.
On the Comex division of the New York Mercantile Exchange, copper futures for July delivery traded at USD3.488 a pound during European morning trade, jumping 1.15%.
It earlier rose by as much as 1.4% to trade at USD3.496 a pound, the highest since May 22. Prices touched USD3.386 a pound on May 23, the lowest since January 10.
Market sentiment firmed after weekend opinion polls in Greece indicated that pro-bailout party New Democracy was leading the polls ahead of a general election next month.
The likelihood of Greece leaving the euro has been growing since early May, when anti-bailout political parties deprived pro-austerity parties of a majority at the polls.
The euro inched up from last week’s 22-month low against the U.S. dollar, while the dollar index, which tracks the performance of the greenback against a basket of six other major currencies, was down 0.5% to trade at 82.10.
On Friday, the index hit the highest level since September 2010.
Despite the relief rally, copper prices remained vulnerable to further losses amid growing concerns over the fiscal health of Spain.
Ratings agency Standard & Poor’s cut the ratings on five Spanish banks on Friday and said it believes the country is entering a double-dip recession.
Adding to the gloomy environment, the president of Catalonia, Spain's wealthiest autonomous region, said on Friday it had few options to refinance over EUR13 billion in debt due this year.
Furthermore, a government source said on Sunday that Spain may recapitalize its fourth-largest bank, Bankia, which last week asked for EUR19 billion in funding.
The fears pushed up yields on Spanish 10-year government bonds to above 6.5%, the highest level since November of last year.
Europe as a region is second in global demand for the industrial metal. Prices have tracked investor sentiment toward the euro zone’s debt crisis in recent months.
Meanwhile, hopes for fresh monetary easing by China to prop up growth in the world’s second largest economy provided further support after Beijing pledged to speed up approvals for new infrastructure-related projects last week.
China is the world’s largest copper consumer, accounting for almost 40% of world consumption last year. Fears over a slowdown in copper demand from the Asian nation have been weighing on prices lately.
Copper is sensitive to the global economic growth outlook because of its widespread uses across industries.
Elsewhere on the Comex, gold for August delivery rose 0.7% to trade at USD1,582.25 a troy ounce, while silver for July delivery gained 0.85% to trade at USD28.62 a troy ounce.
Trading is expected to be subdued on Monday amid a lack of key economic data and a U.S. market holiday for Memorial Day.