SINGAPORE: London and Shanghai copper prices hit their highest in nearly seven weeks on Wednesday, cheered by news that China is seeking more effective policies to ensure stable economic growth.
Concerns about the budget talks in Washington were temporarily shelved as risk appetite returned, spearheaded by Shanghai shares that had rallied nearly 3 percent in their biggest one-day rise since the end of September.
China will make policies more targeted and effective in 2013 to help with the economic recovery, state television quoted Chinese Communist Party chief Xi Jinping as saying on Tuesday.
"Risk appetite is back," said a Singapore-based trader, adding that some stop-loss buying helped fuel the rise in copper.
"The general sentiment is that the US fiscal problems will probably just be kicked down the road, and we may even see a short-term rally."
The $8,100 level is seen as a key resistance on copper's ascent, traders said.
Talks to avoid the US "fiscal cliff", $600 worth of tax hikes and spending to take effect early next year, remained at a stalemate, although Republican lawmakers' unity against President Barack Obama's stance on higher tax rates for the wealthiest Americans showed signs of strain.
Three-month copper on the London Metal Exchange rose to $8,074.75 a tonne, its highest since Oct. 19, before easing to $8,055 by 0704 GMT.
The most-traded March copper contract on the Shanghai Futures Exchange gained more than 1 percent to a near seven-week high of 57,970 yuan ($9,300) earlier in the day, and closed at 57,760 yuan.
Technical analysis suggested that LME copper will form a top at around $8,046 while Shanghai copper's gains are limited at 58,480 yuan, said Reuters market analyst Wang Tao.
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