Investing.com - Copper futures rose sharply on Thursday, as Chinese equity markets rebounded from a brutal selloff in the prior session, easing jitters over an ongoing stock market collapse.
Copper for September delivery on the Comex division of the New York Mercantile Exchange jumped 5.0 cents, or 2.23%, to trade at $2.298 a pound during morning hours in London.
Copper prices tumbled to a six-year low of $2.209 on Monday, as steep declines on China's stock market and growing concerns over the health of the Asian nation's economy dampened demand for the red metal.
The Asian nation is the world’s largest copper consumer, accounting for almost 40% of world consumption last year.
The Shanghai Composite rallied more than 5% on Thursday to reclaim the key 3,000-level, after crashing 23% over the past five sessions.
The upbeat sentiment carried over to European markets, where Germany's DAX rallied more than 2% after the open, while France’s CAC 40 and London's FTSE 100 were both up around 2%.
Appetite for riskier assets improved after Wall Street notched its biggest one-day gain since 2011 overnight. U.S. stock markets soared almost 4% Wednesday, boosted by upbeat economic data and dovish comments from a key Federal Reserve official.
Data on Wednesday showed that core capital goods orders, a closely watched proxy for business spending, rose 2.2% last month, the biggest increase since June last year.
Meanwhile, New York Federal Reserve President William Dudley said that the case for a rate hike in September is "less compelling" given international developments and volatility in financial markets. Dudley is a voting member of the Federal Open Market Committee.
Elsewhere, gold futures for December delivery inched up $1.80, or 0.16%, to trade at $1,126.40 a troy ounce, while silver for September delivery tacked on 16.4 cents, or 1.17%, to $14.20.
Some traders believe the U.S. central bank could postpone raising interest rates until December, as officials are likely to remain concerned over weak global growth and inflation pressures due to China’s shock currency devaluation move and plunging oil prices.
A delay in raising interest rates would be seen as bullish for gold, as it decreases the relative cost of holding on to the metal, which doesn't offer investors any similar guaranteed payout.
Later in the session, the U.S. is to release revised data on second quarter economic growth, as well as the weekly report on initial jobless claims and pending home sales.