Copper rises to 3-week high on fund buying; Fed minutes eyed

Copper prices rose to a three-week peak on Tuesday as a lower-than-expected stocks release in China and strong US jobs data fuelled fund buying momentum in the red metal.

Three-month copper on the London Metal Exchange advanced 0.3% to $9,537 a tonne by 0410 GMT, after rising as much as 0.6% earlier in the session to $9,569, its highest since June 16.

The most-traded August copper contract on the Shanghai Futures Exchange increased 1.1% to 69,610 yuan ($10,773.21) a tonne. The contract hit its highest since June 15 at 69,970 yuan earlier in the session.

China's state reserves administration is scheduled to auction 20,000 tonnes of copper - equivalent to only 2.3% of the country's output in May, among other metals on July 5-6.

Meanwhile, data on Friday showing an acceleration in US hiring boosted hopes of stronger demand for metals and a sustained recovery in the world's biggest economy.

"Everyday that the closing price is above the prior, the momentum builds for the momentum-chasing funds," said a Singapore-based metals trader.

Minutes from the US Federal Reserve's latest policy meeting due on Wednesday might determine the near-term direction of the dollar as investors look for insight into the thinking behind last month's hawkish shift in which Fed members projected a start to rate hikes in 2023.

Copper will be under pressure as the US government fiscal support is waning. Meanwhile, the Chinese have been talking down prices and releasing inventories at discounts and banks are not picking up the slack to lend to businesses, the trader said.

"It's not doom and gloom yet. It's just that we've peaked in growth rates of prices. From now on the trend is only flattish to gently creeping upwards," the trader added.