By David Hodari and Benjamin Parkin
A lower U.S. dollar helped steady copper prices Wednesday despite concern over mounting trade tension between the U.S. and China.
The copper market was lower for much of the session before ending slightly higher. The front-month June contract rose 0.3% to $3.0595 a pound at the Comex division of the New York Mercantile Exchange.
"Copper is having a hard time right now," said Bob Haberkorn, a senior market strategist at RJO Futures. "But considering how low the dollar is and how strong equities are today, it's given it a slight lift."
The selling in the copper market started after Asian equities tumbled overnight, though U.S. and European stocks stabilized.
The WSJ Dollar Index, which measures the currency against a basket of 16 others, fell 0.5% to 87.13, eroding its recent gains. A weaker greenback means less expensive dollar-denominated commodities for holders of other currencies.
Traders were concerned recent tension between the U.S. and China could endanger economic growth and dampen demand for copper. China consumes around half of the world's copper, making prices for the industrial metal highly sensitive to the fortunes of its economy. Analysts say a trade war between Washington and Beijing could hurt growth both there and globally.
"Assumptions of synchronized growth have been baked into prices since late 2017 and base metals are doing what they do what they do when there is any risk of derailed global growth," said Oliver Nugent, a strategist at ING.
The White House said earlier this week it would announce by June 15 a final list of $50 billion in imports from China that would be subject to tariffs of 25%, with the duties implemented "shortly thereafter."
Those tariffs are the first in a package that it said could lead to duties on $150 billion in Chinese imports. In response, China's Commerce Ministry said it would defend its "core national interests."
Those developments, combined with unfolding political drama in Europe and sluggish economic data from the eurozone in the most recent month, unsettled copper investors.
Trade jitters provoked high volumes on the London Metal Exchange, with early trading at 133% of the 20-day average turnover, according to Alastair Munro, a broker at Marex Spectron.
LME inventories have also now slipped for eight straight days in a move which would normally boost prices.
Traders also appeared to ignore other potentially supportive factors. The Indian state of Tamil Nadu earlier this week ordered Vedanta Resources to close a copper smelter that produced 400,000 tons of metal a year.
Gold prices were slightly higher Wednesday, lifted by the dollar. The precious metal has recently become more sensitive to the value of the greenback than to geopolitical uncertainty, analysts say, undermining its typical role as a safe-haven asset.
June contracts rose 0.2% to $1,301.50 a troy ounce.
Write to David Hodari at David.Hodari@dowjones.com and Benjamin Parkin at Benjamin.Parkin@wsj.com