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Copper off 2-week low on weaker dollar, China concerns limit gains

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Shutterstock photo - Copper futures edged higher on Thursday, as a broadly weaker U.S. dollar prompted investors to return to the market to seek cheap valuations after prices fell to a two-week low.

Gains were limited amid ongoing concerns over the global economic outlook, especially in top consumer China.

On the Comex division of the New York Mercantile Exchange, copper futures for July delivery traded at USD3.306 a pound during European morning trade, up 0.3% on the day.

New York-traded copper prices fell by as much as 1.2% earlier in the session to hit a daily low of USD3.258 a pound, the weakest level since May 16.

Copper's gains came as the dollar fell below a key support level to hit a three-week low against the yen, leading the greenback lower against all the other major currencies.

The dollar index, which tracks the performance of the greenback against a basket of six other major currencies, declined 0.25% to trade at 83.46, the weakest level since May 14.

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

Market players looked ahead to the weekly U.S. report on jobless claims later in the global day amid ongoing speculation over whether the Federal Reserve is moving closer to scaling back its USD85 billion-a-month asset purchase program.

Copper prices tumbled sharply on Wednesday after the International Monetary Fund cut its estimate for China's economic growth for this year and the next, fuelling concerns over a slowdown in demand from the world's largest copper consumer.

Copper traders are looking ahead to the release of key Chinese manufacturing data due on Saturday.

Data last week showed that manufacturing activity in China contracted for the first time in seven months in May.

Elsewhere on the Comex, gold for August delivery rallied 1.1% to trade at USD1,407.45 a troy ounce, while silver for July delivery jumped 1.15% to trade at USD22.71 a troy ounce. - offers an extensive set of professional tools for the Forex, Commodities, Futures and the Stock Market including real-time data streaming, a comprehensive economic calendar, as well as financial news and technical & fundamental analysis by in-house experts.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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