Copper hits 15-week high on Fed stimulus; China PMI eyed

Investing.com - Copper futures edged up to hit the highest level since October on Thursday, after the Federal Reserve reaffirmed its commitment to maintaining its easing program at the outcome of its latest policy meeting.

On the Comex division of the New York Mercantile Exchange, copper futures for March delivery traded at USD3.763 a pound during European morning trade, up 0.35% on the day.

New York-traded copper prices rose by as much as 0.6% earlier in the day to hit a session high of USD3.772 a pound, the strongest level since October 11.

The Fed said Wednesday that it will continue its USD85 billion a month quantitative easing program “if the outlook for the labor market does not improve substantially.”

The U.S. central bank also reiterated that it will continue to hold interest rates close to zero until the unemployment rate falls below 6.5%.

The Fed’s quantitative easing program is viewed by many investors as a major source of liquidity that weakens the U.S. dollar and helps support prices of commodities and other hard assets, including gold.

The statement came after data showed that the U.S. economy contracted 0.1% in the fourth quarter, confounding expectations for growth of 1.1% and a sharp slowdown from growth of 3.1% in the preceding quarter.

With the Fed meeting behind them, gold traders will now turn their attention to Friday's nonfarm employment report.

Elsewhere, China will release its official manufacturing data for January on Friday, providing investors with another chance to see whether the recovery in the world’s second largest economy remains on track.

China is the world’s largest copper consumer, accounting for almost 40% of world consumption last year.

Also on the Comex, gold for April delivery declined 0.35% to trade at USD1,675.85 a troy ounce, while silver for March delivery lost 0.6% to trade at USD31.98 a troy ounce.