LONDON: Copper was heading for its first weekly gain in seven weeks on Friday but the day’s upward progress stalled after stronger than expected US employment data boosted the dollar.
Fuelling gains on Thursday and early Friday were a surprise rise in Chinese factory activity and a deal to avert a US debt default, which boosted global stock markets.
With investors also betting that the US Federal Reserve will not raise interest rates further at its next meeting, appetite for riskier, growth-linked assets grew.
But the dollar turned higher after data showed US job growth accelerated in May, pressuring dollar-priced metals by making them costlier for buyers with other currencies.
Benchmark copper on the London Metal Exchange (LME) was roughly unchanged at $8,242 a tonne at 1630 GMT having earlier touched $8,381, its highest since May 11.
It was up around 1.3% this week, but still down about 14% from its January peak owing to China’s weak economic recovery and growth-stifling increases to interest rates elsewhere.
Economic and factory growth remain weak globally, but investors appear to have exhausted their desire to sell copper, said Saxo Bank strategist Ole Hansen.
In a sign of improved demand, the discount for cash copper versus metal delivered in three-months has narrowed to $3.50 a tonne from around $65 ten days ago.
“To move higher, we need some improvement in the economic numbers,” he added.
LME aluminium was down 0.7% at $2,266 a tonne, zinc rose 1.6% to $2,303, nickel fell 1% to $21,110, lead was up 1.8% at $2,034 and tin climbed 0.4% to $25,525.
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