Copper jumps as Shanghai Composite surges 5.34%; Comments by Fed official weigh
On Thursday copper futures jumped over 2% as China equity market recovered from a grinding selloff in the prior session, easing concerns over the lingering collapse.
Comex copper for September delivery jumped 2.36%, to trade at $2.301 a pound during morning hours in London.
On Monday copper prices tumbled to a six-year low of $2.209, as sharp drops on China's stock market and growing concerns over the health of the Asian nation's economy dampened demand for the red metal.
The Shanghai Composite hit 5.34% on Thursday to reclaim the key 3,000-level, after crashing 23% over the past five sessions.
“For now the bulls, it seems, have wrestled back control from the bears," said IG chief market strategist Chris Weston. Overall, markets appear to be saying, “We’ve had our correction, the macro concerns were probably a touch exaggerated and it’s time to expose ourselves to select stocks again.”
Risk appetite increased after Wall Streeе logged its biggest one-day gain overnight since 2011, soaring almost 4% Wednesday.
Data released Wednesday signaled core capital goods orders, a closely watched proxy for business spending, climbed 2.2% last month, the biggest increase since June last year.
In the meantime, New York Federal Reserve President William Dudley said that the case for a rate hike in September is "less compelling" given international developments and volatility in financial markets. Dudley is a voting member of the Federal Open Market Committee.
A number of market players believe the U.S. central bank could delay raising interest rates until December, as officials are likely to remain worried over weak global growth and inflation pressures due to China’s shock currency devaluation move and plunging oil prices.
Postponing interest rates hike would be seen as bullish for commodities, as it decreases the relative cost of holding on to the metal, which doesn't offer investors any similar guaranteed payout.
