LONDON: Copper prices bounced back on Friday, buoyed by hopes that the US and Iran could sign a peace deal this weekend, helping ease concerns over rising inflation and slower economic growth. Benchmark three-month copper on the London Metal Exchange gained 1.2percent at USD13,650 a metric ton in official open-outcry trading, snapping two days of losses that saw copper hit its lowest in three weeks.
Copper prices slid on Thursday amid one of the worst outbreaks of violence between the US and Iran since the sides agreed to a ceasefire in April. A memorandum between the United States and Iran to halt the war in the Gulf could be signed as soon as Sunday, a Western source told Reuters on Friday. “I’ve lost count of the number of peace deals, but at least the market is trying to build up some excitement about this one and hopefully they’re right,” said Ole Hansen, head of commodity strategy at Saxo Bank in Copenhagen.
“The market is trying to bet that we’re seeing a potential end to the inflation scare. Not that it’s going to collapse, but at least it could prevent it from rising further.” The most-traded copper contract on the Shanghai Futures Exchange rose 1.2percent to 104,660 yuan (USD15,474.24) a ton, while US Comex copper futures climbed 1.8percent to USD6.39 a lb. Metals joined other markets reacting to the news as oil prices tumbled and global stocks gained. LME aluminium lagged copper, but rose 0.8percent in official activity to USD3,531 a ton, as a peace deal would relieve pressure on smelters in the Gulf that have been hit by disruptions.
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