Copper futures steady ahead of German court ruling, FOMC meeting

Copper futures were little changed near the previous session’s four-month high, as investors were hesitant to make major moves ahead of a key German court ruling on whether the euro zone's permanent bailout fund is compatible with German law. Market players are also looking ahead to the Federal Reserve’s next meeting, which will take place on September 12 and 13, for more clarity on the central bank’s monetary policy. On the Comex division of the New York Mercantile Exchange, copper futures for December delivery traded at USD3.685 a pound during European morning trade, easing down 0.1%. Prices were stuck in a tight trading range of USD3.649 a pound, the daily low and a session high of USD3.693 a pound. Prices rallied to USD3.700 a pound on Monday, the strongest level since May 10. Investors turned jittery ahead of a closely-watched German court ruling scheduled for Wednesday, on the constitutionality of the European Stability Mechanism. Germany’s approval will be necessary in order to implement the European Central Bank’s bond purchasing program announced last week, dubbed Outright Monetary Transactions. Meanwhile, markets continued to eye the outcome of the Fed’s policy meeting on Thursday, amid fresh speculation that the U.S. central bank may announce a third round of quantitative easing to boost growth. Market expectations of a QE3 announcement this week increased after last Friday’s weaker-than-expected jobs report. Past monetary stimulus rounds weakened the U.S. dollar, boosting the price of dollar-denominated commodities like copper. Copper prices also drew support from ongoing hopes for more stimulus measures by Chinese policymakers to boost growth in the world's second biggest economy. China’s government last week approved a USD157 billion infrastructure spending program to build highways, ports and railways across the country in an effort to stimulate the economy. China is the world’s largest copper consumer, accounting for almost 40% of world consumption last year. Elsewhere on the Comex, gold for October delivery added 0.1% to trade at USD1,731.35 a troy ounce, while silver for December delivery eased up 0.1% to trade at USD33.67 a troy ounce.

Courtesy: ForexPros