Reuters reported that London copper slipped retreating from a three week high in the previous session, as concerns resurfaced over fiscal troubles in the United States but signs of an economic revival in top consumer China cushioned prices.
Investor fears rose after US Senate leader Mr Harry Reid said that he was disappointed there had been little progress in budget talks to solve year end tax increases and spending cuts known as the fiscal cliff.
Worries that the world's largest economy may be facing renewed risk of a recession tainted a recovery in sentiment after European lawmakers on Tuesday cobbled together an emergency funding package for Greece.
Ms Natalie Robertson an ANZ commodity analyst based in Melbourne said that "There's still a lot of concern around the fiscal cliff also Europe isn't out of the woods yet. Copper prices are probably going to continue on a volatile path until that uncertainty is removed."
Three month copper on the London Metal Exchange slipped 0.48 percent a tonne to USD 7,769 by 0710 GMT. Copper hit its highest since November 2nd 2012 after European lawmakers clinched a debt deal for Greece which boosted the euro to a one month high. LME copper prices are up more than 2% so far this year.
Ms Robertson said that US lawmakers were deadlocked after President Barack Obama launched on Tuesday a public relations push to raise taxes on wealthy Americans. Still, a revival in China's economy, buttressed by renewed expansion in its manufacturing sector into next year should keep a floor under copper prices.
She said that "Our expectations are that the manufacturing sector will continue to pick up in November which should be supportive for market sentiment."
The expansion of China's vast manufacturing sector accelerated in November for the first time in 13 months, a factory survey showed, signalling the pace of growth has revived after seven consecutive quarters of slowdown. The most-traded March copper contract on the Shanghai Futures Exchange was little changed at CNY 56,180 per tonne. China's official November PMI is due for release December 1st 2012
Demand will benefit from news that China approved construction of two city subway projects worth CNY 49 billion joining a list of railway projects aimed at boosting growth in the world's second biggest economy.
