LONDON: Copper prices clambered higher on Wednesday as investors bet the US central bank would not raise rates too quickly, allowing economic growth and metals demand to keep increasing.
Three-month copper on the London Metal Exchange gained 1.3% to $9,925.50 a tonne in official open-outcry trading, building on its 0.8% rise in the previous session.
The US Federal Reserve is expected on Wednesday to signal plans to raise interest rates in March as it focuses on fighting inflation.
"The mood on markets has changed overnight and I think it's because most market players think the Fed will deliver this evening, but will not over-deliver," said analyst Daniel Briesemann at Commerzbank in Frankfurt.
LME copper may test support at $9,798 this week
"If the Fed acts in a moderate manner, the economy will still continue recovering from its COVID low in 2020, and this supports metals demand in general."
The upbeat mood lifted equity markets, while oil rose back towards recent seven-year highs on tension between Russia and Ukraine.
In China, the most-traded copper contract on the Shanghai Futures Exchange finished up 1.3% at 70,730 yuan ($11,192) a tonne.
Signs of near-term physical demand in China, however, were not as rosy. The Yangshan copper premium was last at $62 a tonne, the lowest since August last year and down from $88 a month ago.
LME aluminium slipped 0.4% in official activity to $3,079.50 a tonne, pausing after climbing by 2.1% on Tuesday on worries that Russia-Ukraine tension would hit supply.
LME zinc advanced 1.2% to $3,614 a tonne, lead added 0.5% to $2,345, nickel climbed 2% to $22,775 and tin gained 2% to $42,200.
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