Copper futures were on the rise on Wednesday, advancing as much as 1 percent in anticipation of the U.S. Federal Reserve indicating it is driving toward intervening to boost the world's largest economy, Reuters reports.
The prospect of the central bank implementing a third round of quantitative easing is likely to be boosted by the minutes of the June meeting, which are set to be released on Wednesday afternoon.
A much talked about third round of asset purchasing by the central bank is more colloquially known as QE3.
"A lot of stuff is rallying into the Fed minutes," senior commodities broker Phillip Streible with futures brokerage R.J. O'Brien told Reuters. "There's the thought that maybe the Fed hints at another QE."
At 2:27 p.m. on Wednesday, copper futures gained 0.43 percent, a 0.0145 lift to $3.4125 per pound.
The reddish metal is sensitive to global economic and financial developments due to its myriad uses in manufacturing, construction and other industries.
Copper split against the shared currency of the European Union as the embattled monetary unit lost value against the U.S. dollar.
Doubts about Operation Twist
The U.S. Federal Reserve already has embarked on a continuation of a program for bond maturity extension known as Operation Twist. However, that intervention has not persuaded all investors regarding its effectiveness.
China, the globe's largest consumer of the industrial metal, is likely to release economic data from the second quarter. Accounting for roughly 40 percent of the world's demand for copper, the Asian nation has endured hiccups as of late and the performance of the reddish metal has reflected those challenges.
One economist told the news source that troubles with the nation hosting the globe's second-largest economic system probably will resume. The U.S. hosts the globe's largest economy.
"The (Chinese GDP) numbers are likely to be gloomy," economist Ross Stratchan with Capital Economist told Reuters. "Recent action from the Chinese has indicated that data has been softer than they anticipated, causing the interest rate cut we saw last week. It's not surprising in that light that industrial metals prices have been soft."
Peru's top banker views bright future
But one key individual forecast that the Asian nation just might be on the upswing and ready to bounce back during the third quarter of the year.
President Julio Velarde of the central bank of Peru told Bloomberg that the nation he serves is poised to meet or push past economic growth targets. The country trails only Chile for copper production and is a top supplier to China.
During the interview with the news source, Velarde also predicted Europe will not be completely hobbled during its struggle with the sovereign debt crisis.
"I believe we are going to grow close to 6 percent," Velarde told the news source. "I am optimistic the slowdown in China will be only in the second quarter and the third quarter it will recover and there won't be a meltdown in Europe."
The past 12 months have seen the top export of Peru drop roughly 21 percent during challenging economic times in China.
But the price of the reddish metal also is set to gain, the central bank chief said.
"Some mining projects of copper have been delayed around the world so we will probably have in the next two years good prices – unless there is a bigger slowdown, of course, in the world economy," the central bank president told the news source.
The Asian nation noted on Tuesday that June import of copper fell more than 17 percent last month from figures in May, according to The Wall Street Journal.
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