SINGAPORE: London copper edged up on Thursday towards the 2-1/2-month high hit in the previous session as relief over a last-minute deal to avert a US fiscal disaster continued to underpin prices.
Commodities made a powerful start to the new year, with oil, gold and copper hitting multi-week highs on Wednesday after the US Congress passed a bill that raises taxes on wealthy individuals and families, sparing middle- and low-income earners.
"The sentiment on base metals is turning more positive, especially now the US fiscal crisis has been kicked down the road," said Nick Trevethan, senior commodity strategist at ANZ in Singapore.
President Barack Obama and Republicans face more fights in the next two months on spending cuts and an increase in the nation's debt limit.
Three-month copper on the London Metal Exchange edged up 0.3 percent to $8,233 a tonne by 0716 GMT, after hitting a high of $8,250 earlier in the session, a hair off the $8,255 it hit on Wednesday, which was the highest since Oct. 18.
LME copper jumped more than 3 percent in the previous session, its biggest daily gain in more than three months.
The Shanghai market remains closed on Thursday for a public holiday, and will resume trading on Friday.
The demand outlook for base metals also got a boost from the upbeat purchasing managers' index data for China's manufacturing and service sectors released over the past few days, which indicated a steady revival in growth in the world's No.2 economy and top consumer of many raw materials.
LME zinc rose to an 11-month high of $2,175. Lead jumped to $2,499, the highest since Sept 2011.
"The passive money is coming in," said a Singapore-based trader, "It's the first few days of the year and obviously with the 'fiscal cliff' bill going through, people feel like they want to be long on growth and metals."
LME copper stocks rose to an 11-month high of 320,500 tonnes by Dec. 31. Nickel stockpiles climbed to 141,690 tonnes, the highest since May, 2010.
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