Copper prices rose to a one-week high on Friday as weaker-than-expected US retail sales data revived hopes for a June rate cut from the Federal Reserve and lifted risk appetite among investors.
Three-month copper on the London Metal Exchange was up 0.3% at $8,337 a metric ton, as of 0424 GMT, after hitting its highest since Feb. 8 earlier in the session.
The contract is up 2% so far this week.
Data on Thursday showed US retail sales fell more than expected in January, pulled down by declines in receipts at auto dealerships and gasoline service stations.
The dollar index, which measures the US currency against six major rivals, was up 0.09% at 104.35, having slipped 0.4% on Thursday after a mixed set of US economic data.
A weaker US currency makes dollar-priced metals less expensive for holders of other currencies. According to the CME Fed Watch Tool, traders now see a 78% chance of a rate cut in June.
In the wider financial market, Japan’s Nikkei charged towards an all-time high on Friday, helped by a buoyant Wall Street.
Copper, widely used in power and construction, is down more than 3% this month on concerns about demand from top consumer China and its property sector in particular, though activity is muted this week as China celebrates the Lunar New Year.
Copper slips on interest rate worries
Meanwhile, LME aluminium edged 0.1% lower to $2,222.50 a ton.
“On the demand side, a subdued growth outlook across major economies is expected to weigh on aluminium demand in 2024,” BMI analysts said in a note.
However, “we expect the global aluminium market surplus to narrow in 2024 compared with 2023, which will allow for a slight rebound in prices.”
LME nickel was steady at $16,260, zinc gained 0.1% to $2,356.50 and lead rose 0.2% to $2,045.50.
Tin ticked 0.3% higher to $27,385.
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