Dec 15, 2011 NEW YORK (Dow Jones)--Copper futures steadied Thursday after the previous day's steep selloff, as some investors viewed a drop in the dollar and the release of more upbeat economic data as a buying opportunity.
The most actively traded copper contract, for March delivery, recently traded up 3.9 cents, or 1.2%, at $3.3175 a pound on the Comex division of the New York Mercantile Exchange.
Futures tumbled by 4.7% Wednesday, as the euro's drop below the key $1.30 level and rising Italian borrowing costs spooked investors and spurred a flight from commodities. Gold crashed through the $1,600 mark and settled at a five-month low, and Nymex crude oil sank by more than 5%.
But markets were calmer Thursday after a successful Spanish bond auction and some better-than-expected economic data, and the European common currency rebounded against the dollar, easing the pressure on dollar-denominated copper.
"Given the run of weakness across markets in recent days, prices are looking oversold," said William Adams, head of research with metals research service FastMarkets. "We would not be surprised to see some rebounds, as long as the data and news flow are not too bearish."
Readings on the manufacturing in China and the euro zone released Thursday both showed the sectors continued to contract in December, but at a slower pace than in November.
In the U.S., the number of workers filing new applications for unemployment benefits fell to the lowest level since May 2008, a sign that the long-struggling U.S. labor market was improving.
Copper is sensitive to the economic outlook because of its widespread uses in construction and manufacturing. Prices have generally tracked investor sentiment toward Europe's debt crisis in recent weeks, as a credit crunch there could shackle the industrial economy.