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English>>China Business

Copper, gold step up on easing hopes

By Michael Bellart  (Global Times)

13:28, August 24, 2012

Domestic copper and gold futures rose Thursday as the prospects of additional monetary stimulus from the US Federal Reserve increased overnight, but disappointing preliminary factory output data in China kept gains in check.

The most traded copper contract on the Shanghai Futures Exchange (SHFE) rose 1.17 percent to close at 55,980 yuan ($8,809.60) per ton.

The contract dipped in the morning session after the release of HSBC Holdings and Markit Economics' Flash purchasing managers' index (PMI) for August, a key preliminary indicator of manufacturing activity. The index fell sharply to 47.9, down from 50.9 in July, its lowest reading in nine months, according to the Australian bank ANZ.

The SHFE contract had opened 0.23 percent above Wednesday's closing price, trailing gains in the three-month copper contract on the London Metal Exchange (LME) overnight.

The LME contract rose after the US Federal Reserve released the minutes from the latest Federal Open Market Committee meeting. The minutes revealed that many central bank officials favored additional stimulus measures unless the US economy picked up soon.

Still, the news wasn't met with complete optimism. "The mixed response to the news - strength in some commodities, while US equities only managed to pare losses, raises questions about the efficacy of further (monetary easing) at this point," ANZ commodities analysts said in a note Thursday.

The three-month LME contract was trading at $7,673.20 per ton when the Chinese mainland markets closed, up about 1 percent on the day.

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