LONDON: Copper prices hovered below a three-week high on Thursday, bolstered by a weaker dollar but unsettled by continued uncertainty over U.S. tariffs.
Benchmark copper on the London Metal Exchange (LME) was up 0.4% at $9,418 a metric ton by 1000 GMT, having hit a peak of $9,481.50 in the previous session for its highest since April 3.
LME copper has gained more than 15% since hitting a 17-month low of $8,105 this month.
“It’s almost impossible to see what is happening from one day to the next. No doubt the tariff optimism that triggered the risk-on rally early in the week has faded again,” said Ole Hansen, head of commodity strategy at Saxo Bank in Copenhagen.
Stocks drifted as traders digested the latest news on the trade war between the United States and top metals consumer China after a U.S. official said on Wednesday that high tariffs between the two were not sustainable.
“Any solution with China is not going to happen overnight, it’s going to take a long time, so the damaging economic impact will probably not be avoided,” Hansen added.
Copper hits three-week high, buoyed easing trade tensions
U.S. Comex copper futures gained 0.5% to $4.87 a lb, bringing the premium over LME copper to $1,314 a ton.
The premium has steadily recovered from $480 on April 4, when traders holding long or bullish positions on Comex were forced to liquidate, Hansen said.
Supporting industrial metals was a weaker dollar, with the dollar index dropping after U.S. President Donald Trump backed down from threats to fire the head of the Federal Reserve and appeared to soften his stance on China.
A weaker U.S. currency makes dollar-priced commodities more expensive for buyers using other currencies.
In other metals, aluminium added 0.4% to $2,442 a ton, zinc climbed 1.5% to $2,679, lead rose 0.6% to $1,958.50, tin gained 1.5% to $31,770 and nickel was up 0.9% at $15,805.
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