LONDON: Copper prices trimmed gains in London on Thursday as the dollar strengthened but stayed on track to snap a four-day losing streak on hopes that top metals consumer China would introduce additional support to boost its economy.
Three-month copper on the London Metal Exchange rose 0.6% to $8,480 per metric ton by 1636 GMT.
The dollar gained after an unexpected fall in US jobless claims boosted chances that the Federal Reserve would continue hiking interest rates if the economy remains strong. A stronger US currency makes dollar-priced commodities less attractive for buyers holding other currencies.
Copper, used in construction and power, has been hit this year by disappointment over the lack of economic stimulus from China that specifically targets base metals.
“Each passing day there seems to be a new micro announcement from the Chinese government about some sort of support for the economy. But so far there has not been the bazooka that many have been hoping for,” said Nitesh Shah, commodity strategist at WisdomTree.
Chinese authorities are weighing mortgage easing to spur homebuying in the country’s biggest cities, Bloomberg News reported.
The move, if confirmed, could spur more home sales and lift some of the weight off subdued commodity demand from the real estate sector.
However, “whether the gains in base metals we see this morning will stick, depends on delivery of the rumoured policy announcement and whether it will be topped up with more support,” Shah said.
On the supply side, base metals have been supported this week by the risks for Peru’s mining corridor from community protests and Indonesia’s plans to raise exports taxes.
On the technical front, copper was squeezed between the 100-day and 21-day moving averages, with the 200-day moving average coming in between them at $8,484.
LME aluminium increased 0.2% to $2,195.5 per metric ton, zinc advanced 1.1% to $2,384.5, lead was up 1.2% at $2,110, tin rose 2.4% to $28,785, while nickel added 1.8% at $21,280.