LONDON: Copper gained on Thursday, reversing earlier losses after the US Federal Reserve said it would promote higher inflation, a move that could weaken the dollar and boost commodities priced in the greenback.
The dollar is trading near a two-year low touched last week, helping to support copper and other dollar-denominated commodities that became cheaper for holders of other currencies.
"There were quite a lot of expectations already priced in but this was a price-supporting statement from the Fed," said Saxo Bank analyst Ole Hansen.
Benchmark copper on the London Metal Exchange was up 0.2% to $6,615 a tonne by 1730 GMT, near a two-year high of $6,707 touched a week ago.
The United States and China traded jibes as military tensions grow between the world's two largest economies, with the US defence chief vowing not to "cede an inch" in the Pacific and China saying Washington was risking soldiers' lives.
The tensions threaten economic growth, which could limit metals demand.
Data showed that profits at industrial firms in top metals consumer China grew for a third straight month in July and at the fastest pace since June 2018, supporting copper.
Total copper inventories on the LME are near a 14-year low, pushing the premium for cash copper over the three-month contract to $19.50 a tonne. A lockdown at Indonesia's Grasberg gold and copper mine would ease after a protest this week by workers angry over not being able to leave the mountain-top mining complex for months.
LME nickel fell 0.2% to $15,130 a tonne after touching its highest since November on concerns over supplies from Indonesia and worries about supplies for China's stainless steel mills.
LME aluminium was down 0.1% to $1,778 a tonne, zinc was up 1% to $2,493, lead was up 0.2% to $1,982 while tin gained 1.2% to $17,775.—Reuters
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