Copper jumped more than 2 percent to a seven-week high on Tuesday as a short-covering rally swept the market higher amid hopes for further economic stimulus by central banks that could reignite sluggish industrial demand for the metal.
In New York, the most-active September COMEX contract settled at $3.54 per lb, up 2.04 percent from Monday. The red metal hit an intraday high of $3.5565, its highest since mid-May. Copper and other commodities outperformed rises in other financial markets as short covering continued apace. They were also boosted by the stronger euro.
Speculative investors have been short copper since mid-May, building their largest bet on lower prices since March 2009 amid deepening despair over the euro-zone crisis, according to Commodity Futures Trading Commission data.