LONDON: Copper prices edged up on Friday from steep falls in the previous session, although investors remained nervous that the United States will not be able to avert a fiscal crisis which could push the world's largest economy into recession.
Trading volumes, however, were thin as markets wind down for the year-end holiday season.
Investors have been closely watching talks in recent weeks between the White House and Republican lawmakers to avert the "fiscal cliff", $600 billion worth of tax hikes and spending cuts which could be triggered in the new year.
In the latest move, a proposal from Republican leader John Boehner to avoid the fiscal cliff failed to get support from his party, casting fresh uncertainty over the talks.
"You're likely to see a resolution to that relatively soon but with the latest uncertain developments overnight, you could see market jitters increase and I would expect that to be negative for industrial metals," said Ross Strachan, economist at Capital Economics.
Three-month copper on the London Metal Exchange (LME) was at $7,790 at 1043 GMT, from a close of $7,772 on Thursday when it hit a three-week intraday low of $7,735 a tonne.
Since a price rally of almost 8 percent from mid-November to a near two-month high on Dec. 12, momentum has begun to fade, with traders cutting risk and squaring positions ahead of year-end.
The metal is up 2.4 percent so far this year.
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