Copper rebounded from a one-week low in New York after a Federal Reserve report showed a bigger-than-expected gain in regional U.S. manufacturing, signaling improved demand prospects for the metal.
The Fed Bank of Philadelphia’s general economic index increased to 19.8, the highest since March 2011 and beating the median forecast of 8 in a Bloomberg survey of economists. The figures, along with a government report showing fewer claims for U.S. jobless benefits, outweighed concerns that policy makers will soon scale back economic stimulus, said Bill O’Neill, a partner at Logic Advisors in Upper Saddle River, New Jersey.
“We had two nice pieces of data today, especially with the Philadelphia Fed report, and that’s helping copper,” O’Neill said in a telephone interview. “In a sense, the specter of some tapering is actually bullish for industrial metals, because it suggests the Fed thinks the economy has enough fuel to show improvement.”
Copper futures for delivery in September increased 0.1 percent to settle at $3.1315 a pound at 1:14 p.m. on the Comex in New York, after falling to $3.1065, the lowest since July 11. The metal slid earlier as signs of rising home prices damped prospects for further economic stimulus in China, the world’s largest metals consumer.
On the London Metal Exchange, copper for delivery in three months gained 0.2 percent to $6,905 a metric ton ($3.13 a pound).
Lead, tin, aluminum, nickel and zinc were also higher in London.