Copper futures rise to session high after Italian bond auction

                        Copper futures rose sharply on Monday, climbing to the highest levels of the session after Italy saw borrowing costs fall to multi-year lows at a government debt auction earlier in the day.

Copper prices received an additional boost from a weaker U.S. dollar, as dollar-priced commodities become less expensive to investors holding other currencies when the greenback falls.

The dollar index, which tracks the performance of the greenback against a basket of six other major currencies, was down 0.45% to trade at 82.20, the weakest level since April 17.

On the Comex division of the New York Mercantile Exchange, copper futures for July delivery traded at USD3.222 a pound during European morning trade, up 1.1% on the day.

New York-traded copper prices rose by as much as 1.2% earlier in the session to hit a daily high of USD3.224 a pound.

Italy’s Treasury sold EUR3 billion worth of ten-year debt at an average yield of 3.94%, the lowest since October 2010 and down from 4.66% at a similar auction last month.

Rome also sold EUR3 billion of five-year government bonds at an average yield of 2.84%, also the lowest since October 2010 and down from 3.65% at a similar auction last month.

Market sentiment found support after a new government was sworn in Italy, ending months of political deadlock after inconclusive elections in February.

Meanwhile, the U.S. dollar was broadly lower against the other major currencies, as Friday’s weaker than expected U.S. first quarter growth data reinforced expectations for continued easing by the Federal Reserve.

The Commerce Department said U.S. gross domestic product expanded by 2.5% in the three months to March, missing expectations for growth of 3.0%.

Market players will be focusing on Wednesday’s policy statement from the U.S. central bank, for further hints regarding the future of the central bank’s monetary easing program.

Investors will also be awaiting the outcome of the European Central Bank’s policy meeting on Thursday, amid growing expectations for a rate cut, as well as Friday’s closely watched report on U.S. nonfarm payrolls.

Elsewhere on the Comex, gold for June delivery rallied 1.2% to trade at USD1,470.35 a troy ounce, while silver for July delivery surged 2% to trade at USD24.27 a troy ounce.
Courtesy : Investing.com