BEIJING: Copper prices hit a nearly five-month high on Friday, driven by hopes that the US Federal Reserve could ease down its interest rate hike path and boost the metal’s demand.

The softer-than-expected US inflation data also sent the dollar sharply lower overnight. A weaker dollar makes greenback-priced metals cheaper for buyers holding other currencies.

Three-month copper on the London Metal Exchange was up 1.5% at $8,398.5 a tonne, as of 0518 GMT, its highest since June 29. The most-traded December copper contract on the Shanghai Futures Exchange advanced 2% to a four-month high of 68,000 yuan ($9,503.58) a tonne. US consumer prices rose less than expected in October, pushing the annual increase below 8% for the first time in eight months, the strongest signs yet that inflation was slowing, which would allow the Fed to scale back its hefty rate hikes.

Sharp rate hikes by global central banks to tame soaring inflation have pressured risk assets this year, with copper prices down 21.8% from a March high.

Among other factors supporting the copper market, global supplies remained tight. Copper inventories on LME warehouses dropped 950 tonnes, trimming headline levels to 80,025 tonnes, their lowest in 7-1/2 months.

Among other metals, LME aluminium was up 1.2% at $2,354 a tonne, zinc rose 2.1% to $2,944.50 a tonne and tin climbed 3% to $20,940 a tonne, while lead nudged 0.1% down to $2,095 a tonne.

Prices were also boosted by reports coming out of a Politburo Standing Committee meeting that suggest Beijing would take more targeted measures to avoid damage to the economy, ANZ Research said. The country’s strict Covid-19 measures have hit its industrial activities and dragged down metals demand.