Copper rallies on strong European PMI; Gold slightly up, but Greek jitters limit gains

Copper rallies on strong European PMI; Gold slightly up, but Greek jitters limit gains

23 June 2015, 11:34
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On Tuesday copper prices surged after touching three-month low during the previous session, as stronger-than-expected data on euro zone manufacturing activity boosted hopes for stronger demand in the metal.

Gold also inched up, though hovering near multi-week lows on Greek concerns.

Comex copper for July delivery climbed 3.0 cents, or 1.16%, to trade at $2.597 a pound during European morning hours.

Futures were likely to find support at $2.558, the low from June 19, and resistance at $2.642, the high from June 18.

On Monday, copper dipped 0.2 cents, or 0.08%, to end at $2.567.

Earlier, however, copper was hurt after data showed that the China HSBC Flash Manufacturing Purchasing Managers' Index rose to 49.6 in June from 49.2 the previous month, still in contraction territory for the third consecutive month. 

China is one of the biggest consumers of the red metal.

However, fresh data from the euro bloc buoyed copper. The Markit Composite Purchasing Managers' Index (PMI), which tracks manufacturing and service sector activity, climbed to 54.1 in June compared with 53.6 in May.

The French PMI data showed the country's manufacturing sector expanded in June for the first time since April 2014.

Germany's composite PMI climbed to 54.0 in June from 52.6 in May.

Also on the Comex, August gold futures added 30 cents, or 0.03%, to trade at $1,184.40 a troy ounce, while silver futures for July delivery dropped 16.7 cents, or 1.03% to trade at $15.97 an ounce.

Greece

Investors are getting nervous, as Monday brought no deal between Greece and its creditors, while the eurogroup leaders decided to hold another meeting on Wednesday. Thus, Greek Prime Minister Alexis Tsipras has been given 48 hours to bring a deal with his country’s creditors to the finish line and end a five-month impasse.

Bloomberg eurozone economist Maxime Sbaihi meanwhile twitted:

"Calmer but important day for Greece: new technical details are being worked out today ahead of tomorrow's Eurogroup. Procrastination over."

Greek government officials are insisting this morning that negotiations are still ongoing, says the Guardian.

“The climate has improved, we are closer to a solution. This of course depends on whether the institutions accept the government’s proposal which is the basis for discussion and agreement,” the government spokesman Gavriel Sakellarides told Ant 1 TV.

“We are fully aware that there are in the proposal, measures that are hard and which under other circumstances we would never take.”

“The point of the measures was to transfer the burden from the poor to the rich”, he said. “We are waging battle, there are many proposals that will allow growth and breathing space,” he said singling out the reduction of the primary surplus as a major victory for the government.

“It ensures fiscal benefit.”

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