Copper futures gain on Spain bailout hope

NEW YORK: Copper futures rose the most last week on speculation that European officials will unveil a bailout plan for Spain as soon as next week, easing concerns that metal demand will ebb.

Spanish Economy Minister Luis de Guindos is in talks with European Commission authorities on a new rescue plan to be presented on September 27, the Financial Times reported, citing unidentified officials. The dollar weakened against the euro, increasing the appeal of commodities as alternative assets.

"If such an agreement materialises, it could provide yet another boost to the markets through a stronger euro, as investors would be pleased to see a bailout being put in place before yields rise to crisis levels," Edward Meir, an analyst at INTL FCStone in New York, said in a report.

Copper futures for December delivery advanced 0.8 per cent to $3.789 a pound at 1:24 p.m. on the Comex in New York, the biggest gain for a most-active contract since September 14. The metal, down 1.1 per cent this week, has climbed 10 per cent in 2012.

There are signs that Spain and Italy may be reluctant to move ahead on a rescue plan, Meir said. The two countries won't request bailouts unless a surge in bond yields leaves them shut out of markets, because no government will accept conditions voluntarily for aid, Gianfranco Polillo, Italy's undersecretary of finance, said last week.