Copper rose on Tuesday as stock markets recovered and worries about the health of the U.S. economy decreased as the Federal Reserve met to decide on interest rates.
Equity markets in Europe, Asia and the U.S. gained. Economists observe a big probability that the Fed will reduce borrowing costs at least by a 0.25 percentage point after the end of its two-day policy meeting on Wednesday reducing risks of weak demand of the red metal.
Some market investors expect that another rate cut will stave off a recession in the worldÂ´s largest economy and second largest consumer of copper after China.
Copper Futures for March Delivery gained 10 cents or 3.14 percent to $3.2895 a pound at the COMEX division of the New York Mercantile Exchange.
CopperÂ´s gain was supported by a report on U.S. durable-goods orders - which are considered a leading indicator of manufacturing activity- that rose 5.2 percent on December, the Commerce Department said today. A survey made by Thomson's IFR Markets had expected durable-good orders to grow 1.6 percent in the month.
The price of copper rose to a two week high today, peaking at $3.3185 before falling.
Other factors in copper's price are several winter storms in China which have affected the metal sector according to analysts. The weather has caused electrical shortages and material transportation problems in metal companies in the top consumer of copper.
Copper supplies stored in London Metal Exchange warehouses dropped 400 metric tons Tuesday, leaving them at 171,275. Comex inventory data showed late Monday inventories were down 58 short tons at 13,978 short tons.