By Stephanie Yang and Katherine Dunn

Copper prices gained for the 12th day in a row on Tuesday, extending the longest rally in at least 28 years on a brighter economic outlook for China.

Copper for December delivery settled up 3.1% to $2.3800 a pound on the Comex division of the New York Mercantile Exchange, hitting a new 52-week high in the biggest one-day gain since July.

Improved economic data and manufacturing activity from major consumers China and the U.S. have helped copper prices gain in the past two weeks, as investors speculate on a pickup in demand.

Dane Davis, commodities analyst at Barclays, said copper's rise has been part of a broader rally in metals, as China's economic picture has brightened.

"What's causing this is that the outlook for China has improved at least in the short term," said Mr. Davis. "It's hard for copper not to join in on that rally."

However, some analysts remain cautious on copper's ability to continue its gains. China's economic recovery has been helped by economic stimulus, which may see benefits fade in the longer term.

"If the property market shows signs of weakness going into the future, we could see copper's gains reverse," Mr. Davis said. "We think its a rally built on tenuous grounds."

The excess optimism may make copper prices vulnerable to a pullback. "It does look overbought at these levels," said Bob Haberkorn, senior market strategist at RJO Futures. "Copper's still trying to digest improved Chinese credit conditions... I didn't think we'd get this far."

The results of the U.S. presidential election could also derail the copper rally. Investors across markets are awaiting the results as the country heads to the polls on Tuesday.

While a victory for Hillary Clinton may bring a slight relief rally, a victory for Donald Trump could cut back demand for risky assets, including commodities as a whole, said Caroline Bain, senior commodities economist at Capital Economics.

Until those results are in, investors are expected to keep their eyes trained on the U.S.

"I think everything is going to be overshadowed by the election this week," said Ms. Bain.

Write to Stephanie Yang at stephanie.yang@wsj.com and Katherine Dunn at katherine.dunn@wsj.com

(END) Dow Jones Newswires

November 08, 2016 15:16 ET (20:16 GMT)

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