July 30 (Bloomberg) -- Copper prices rose the most in two weeks as government reports showed signs of economic improvement in the U.S. and Europe, easing concern that the global recession will continue to reduce metals demand.
The number of Americans collecting unemployment insurance decreased for a third week, signaling stabilization in the job market. European confidence in the economic outlook increased more than forecast in July. Copper has surged 82 percent this year on speculation that demand will increase.
“Today’s sentiment in the market is that the economy is revving up,” said Frank McGhee, the head dealer at Integrated Brokerage Services LLC in Chicago. “Even a modest return to normalcy will boost demand.”
Copper for September delivery gained 8.65 cents, or 3.5 percent, to $2.564 a pound on the New York Mercantile Exchange’s Comex division. The gain was the biggest since July 15.
The metal also rose as China’s central bank said it will maintain a “moderately loose monetary policy.” Futures tumbled yesterday on speculation that loans would be limited. Yesterday, the metal touched to $2.45, the lowest since July 22.
“Our Chinese economists expect the overall fiscal and monetary policy stance in China to remain conducive to economic growth,” Goldman Sachs Group Inc. said in a report. China is the world’s biggest copper consumer.
“The pace of western-world economic growth in the second half of 2009 is likely to more than offset any lull in Chinese base-metals buying,” Michael Jansen, an analyst at JPMorgan Securities Ltd. in London, said in a report.
McGhee of Integrated Brokerage said copper may face a “correction” because demand signals are exaggerated.
“The rally we’re seeing is fragile,” McGhee said. “One minute people are worried about the recession, and the next minute they’re not concerned. It’s dependent on sentiment.”
Copper for delivery in three months rose $187, or 3.5 percent, to $5,602 a metric ton ($2.54 a pound) on the London Metal Exchange. Tin, nickel, lead, zinc and aluminum also advanced.
