Copper futures rise to session high after upbeat U.K. GDP data

Investing.com - Copper futures advanced for the second consecutive day on Thursday, rising to the highest levels of the session after official data showed that the U.K. economy returned to growth in the first quarter, avoiding a triple-dip recession.

Copper prices found further support as investors continued to close out bets prices will move lower, a move known as short covering.

On the Comex division of the New York Mercantile Exchange, copper futures for May delivery traded at USD3.196 a pound during European morning trade, up 1.25% on the day.

New York-traded copper prices rose by as much as 1.65% earlier in the session to hit a daily high of USD3.210 a pound, the strongest level since April 17.

The Office for National Statistics said U.K. gross domestic product expanded by a seasonally adjusted 0.3% in the three months to March, above expectations for a 0.1% gain.

The U.K.’s economy shrank by 0.3% in the final quarter of 2012.

The U.K. economy expanded 0.6% in the first quarter from a year earlier, compared to expectations for a 0.3% increase. The U.K. economy expanded at an annualized rate of 0.2% in the preceding quarter.

Copper is sensitive to the economic growth outlook because of its widespread uses across industries.

Investors now looked ahead to Friday’s U.S. data on first quarter growth to further asses the strength of the country’s economy.

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 82.69.

A weaker dollar boosts demand for raw materials as an alternative investment and makes dollar-priced commodities cheaper for holders of other currencies.

Some technical buying and bargain hunting further supported prices after futures fell to an 18-month low of USD3.059 a pound earlier in the week amid concerns over the economic outlook in top copper consumers China and the U.S.

Wall Street investment bank Goldman Sachs said Wednesday that they expect prices of the industrial metal to rebound over the next three months, after it underperformed other metals the past month.

Prices of the red metal are down 20% since hitting a recent high of USD3.978 a pound hit in February 2012, meeting the standard for a bear market.

Elsewhere on the Comex, gold for June delivery rallied 1.5% to trade at USD1,445.65 a troy ounce, while silver for May delivery surged 2% to trade at USD23.28 a troy ounce.