Investing.com - Copper futures rose to an almost three-week high on Wednesday, the first trading day of the new year, as market sentiment strengthened broadly after U.S. lawmakers approved a highly-anticipated budget bill slated to prevent the country from falling into recession.
Official data showing that manufacturing activity in China expanded for the third consecutive month in December provided further support.
On the Comex division of the New York Mercantile Exchange, copper futures for March delivery traded at USD3.685 a pound during European morning trade, up 0.9% on the day.
New York-traded copper prices rose by as much as 1.3% earlier in the session to hit a daily high of USD3.699 a pound, the strongest level since December 13.
The U.S. House of Representatives voted Tuesday night in favor of a deal to avert the fiscal cliff, blocking a series of looming tax increases and spending cuts that could have pushed the U.S. economy back into a recession.
The final vote tally was 257 to 167. The passage came after the Senate approved the measure by a large majority of 89-8 early Tuesday morning.
The bill, which raises taxes for the wealthy and delays spending cuts for two months, now heads to the White House, where President Barack Obama is expected to sign it into law.
Copper prices found additional support after official data Tuesday showed that China's manufacturing Purchasing Managers' Index expanded for the third consecutive month in December.
The PMI held steady at 50.6 last month, above the 50.0-point mark that indicates an improvement in activity.
China is the world's largest copper consumer, accounting for almost 40% of world consumption last year.
Weakness in the U.S. dollar also aided gains. The dollar index, which tracks the performance of the greenback against a basket of six other major currencies, was down 0.1% to trade at 79.87.
A weaker dollar boosts demand for raw materials as an alternative investment and makes dollar-priced commodities cheaper for holders of other currencies.
Elsewhere on the Comex, gold for February delivery added 0.45% to trade at USD1,683.05 a troy ounce, while silver for March delivery rallied 1.7% to trade at USD30.74 a troy ounce.
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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.
