LONDON: Copper prices rose on Friday as the dollar weakened after a sharp drop in US consumer sentiment fed views that the Federal Reserve could hold off on tapering stimulus in the world’s largest economy.
Benchmark copper on the London Metal Exchange (LME)rose 1.3% higher to $9,587 per tonne by 1510 GMT, and was on track to end the week higher after shedding 2.7% last week.
The University of Michigan survey showed US consumer sentiment fell to its lowest level in a decade as Americans gave faltering outlooks on everything from personal finances to inflation and employment.
“The weak Michigan survey sent the dollar sharply lower and that has increased risk appetite across the metals space,” said Saxo Bank analyst Ole Hansen.
“Clearly sentiment is being hurt by the Delta variant and that is raising the question of whether the Federal Reserve is ready to do taper.”
A weaker dollar makes metals cheaper to holders of other currencies. Global equities hit a record high after the US data, underscoring market appetite for risk.
STRIKES: A strike was averted at the world’s largest copper mine, Escondida, in Chile, easing supply concerns. But workers said they would down tools at a mine owned by Codelco and at the operations of JX Nippon Copper. INVENTORIES: On-warrant copper stocks in LME-registered warehouses are near their highest since May 2020 at 222,600 tonnes while weekly data showed Shanghai Futures Exchange stocks slipped 6.5% to 93,032 tonnes.