LONDON: Copper prices hit their highest in more than 14 months on Thursday, helped by fund buying after the US dollar’s dip to a two-week low. Three-month copper on the London Metal Exchange (LME) was up 1.1% at $9,365 a metric ton at 1450 GMT after touching its highest since January 2023 at $9,397.50.
More funds that trade on buy sell signals from numerical models, known as commodity trading advisors (CTA), were buying at close to $9,400 a ton, said Robert Montefusco of brokerage Sucden Financial.
CTA buying was also evident in aluminium, with surging trading interest for June in particular, he added. Daily aluminium trading volumes reached 41,363 lots on Wednesday, the highest since October 2021.
LME aluminium touched $2,461.50 a ton on Thursday for the highest level since April 2023. It was last up 0.4% at $2,438. The rally was supported by a weaker dollar that fell to its lowest since March 21 after weekly US jobless claims rose to a two-month high.
A weaker US currency makes dollar-priced metals cheaper for buyers holding other currencies. Federal Reserve Chair Jerome Powell affirmed that his outlook on lowering interest rates this year remained unchanged and will continue to be guided by economic data.
But another Fed official said the first rate cut would not come until the fourth quarter. Meanwhile, euro zone inflation fell unexpectedly last month, solidifying the case for the European Central Bank to start lowering borrowing costs.
“A notable surge in speculative activity on the LME, paired with expectations of relaxed monetary policy outlook in Europe, has propelled metal prices to their highest levels in several months,” Sucden Financial analysts said in a note. Zinc rose 3.2% to $2,628.5, posting its biggest daily gain in more than six months. The world’s largest zinc producer, Korea Zinc, told Reuters in an interview this week that it was likely to split with its long-term partner.
Nickel gained 1.4% to $17,575 a ton, lead climbed 2.5% to $2,133 and tin was up 0.6% at $28,575. Markets in top metals consumer China were closed for public holidays on Thursday and Friday.