Copper gains on U.S. and China data

Copper gained on Thursday supported by yesterdays weak U.S. economic data that dampened concern of a premature Quantitative Easing deceleration, and news that industrial companies in China increased their profits in May.

On the Comex division of the New York Mercantile Exchange, copper futures for September delivery traded at $3.056 a pound at 10:31 GMT, up 0.52% on the day. Prices ranged between days high and low at $3.077 and $3.036 respectively. Copper lost 0.40% yesterday after gaining 1.06% on Tuesday.

The industrial metal fell 3.14% last week as the stronger dollar weighed on all dollar-priced commodities following Ben Bernanke’s statement on the monetary stimulus’s future. The metal fell to a three-year low of $2.985 on Tuesday amid dim demand outlook in the biggest consumer – China. Concern about the economy’s growth arose following the cash squeeze that has settled in. However, prices rebounded as Ling Tao, deputy director of the Shanghai branch of the People’s Bank of China, said the central bank’s will guide interest rates to a “reasonable range”, which eased concern on the metal’s appeal.

The industrial metal found support by the disappointing U.S. economy news, which dampened partially speculation on an earlier-than-expected scale back of Feds monetary easing program. The Bureau of Economic Analysis said yesterday the final Q1 GDP reading mismatched projections of a 2.4% increase, standing at 1.8%, below Q1 2012′s 2.4% figure. Consumer Spending for the first quarter of the year was also lower than anticipated, gaining 2.6%, but straying from the 3.4% forecast and below last year’s Q1 reading of 3.4%. Core Consumer Spending managed to fulfill expectations and stood at 1.3%, remaining unchanged compared to last year.

Meanwhile, copper also received a boost by positive news from China, the worlds biggest consumer that accounts for 40% of global consumption. After the country received another downward revision of its GDP forecast by Goldman Sachs, down to 7.4% from 7.8% for 2013, the National Bureau of Statistics reported today Chinese industrial companies increased their profits by 15.5% in May, compared to the same period in 2012.

Investors are now looking ahead into upcoming key U.S. economic data. On Thursday, Personal Income, Personal Spending, Core Consumer Spending for May, Pending Home Sales and Initial Jobless Claims are expected to provide information whether the U.S. economy is reaching its recovery goals and remain on track with Fed’s expectations. Next week, Non-Farm Payrolls will give further insight into the labor market in the U.S.