LONDON: Copper prices rose sharply on Thursday on a weaker dollar and expectations of interest rate cuts next year that would boost economic growth and metals demand.
Three-month copper on the London Metal Exchange reached $8,565 per metric ton, up 2.8%, the biggest daily gain since Jan. 9 this year. Copper pared gains to $8,550, up 2.6%, in official open outcry trading.
Fed Chair Jerome Powell said the historic tightening of monetary policy was likely over as inflation falls faster than expected, with a discussion of cuts in borrowing costs coming “into view.” The Fed news prompted rallies across global stock markets on Thursday.
The dollar index hit a four-month low, making greenback-priced base metals cheaper for foreign currency buyers.
Copper price gains were further sustained by mine closures and production cuts, which could change the surplus narrative for next year, Saxo Bank’s head of commodities Ole Hansen said.
Copper dips as China fails to meet investors’ stimulus hope
“Supply disruptions, and now the prospect for lower funding costs could trigger a long-awaited re-stocking of copper,” Hansen added.
Also helping improve sentiment about the troubled property sector in top metals consumer China was news that Beijing and Shanghai relaxed home purchase restrictions on Thursday.
LME aluminium rebounded 1.9% to $2,180 per ton after dipping to a 15-month low on Wednesday.
Nickel was up 1.7% at $16,750, zinc climbed 3% to $2,503, lead rose 1.5% to $2,064, and tin advanced 2.5% to $25,300.
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