Copper bounces off 3-month low on hopes for last-minute Greece deal

Investing.com - Copper prices bounced off a three-month low on Monday, as European leaders prepared to hold last ditch talks on a deal to prevent Greece from defaulting after Athens submitted new proposals, breaking a deadlock with its creditors.

Appetite for riskier assets improved after Greece submitted a new package of economic reforms on Sunday night, indicating that it is prepared to make concessions to break a deadlock to unlock €7.2 billion in funds.

European leaders are to hold emergency talks in Brussels on Monday about Greece’s bailout agreement, which is due to expire on June 30.

Ahead of the summit, Greek Prime Minister Alexis Tsipras was to hold talks with representatives from the International Monetary Fund, the European Central Bank and the eurogroup of finance ministers.

Greece’s existing bailout is set to expire at the end of this month, when it must also repay €1.6 billion to the IMF. A default by Greece could trigger the country’s exit from the euro zone.

Copper for July delivery on the Comex division of the New York Mercantile Exchange tacked on 0.9 cents, or 0.34%, to trade at $2.578 a pound during European morning hours.

On Friday, copper hit $2.558, a level not seen since March 18, before ending at $2.569, down 3.7 cents, or 1.42%. Futures were likely to find support at $2.552, the low from March 18, and resistance at $2.616, the high from June 19.

Prices of the red metal tumbled 10.6 cents, or 4.07%, last week, the fifth straight weekly decline, amid mounting concerns over the health of China's economy. The Asian nation is the world’s largest copper consumer, accounting for almost 40% of world consumption last year.

Elsewhere, gold futures for August delivery declined $7.30, or 0.61%, to trade at $1,194.60 a troy ounce, while silver futures for July delivery shed 1.6 cents, or 0.1% to trade at $16.09 an ounce.

Gold rallied almost 2% last week after the Federal Reserve's rate statement tempered expectations for a rate hike later this year.

The Fed lowered both its U.S. growth forecast and its interest-rate projections, prompting investors to push back expectations on the timing of an initial rate hike.

A delay in raising interest rates would be seen as bullish for gold, as it decreases the relative cost of holding on to the metal, which doesn't offer investors any similar guaranteed payout.