Base metals extended earlier gains during late Thursday trading on the London Metal Exchange (LME), benefiting from a broad-based commodity rally, with substantial gains seen in precious metals and oil, traders said.
"This is a short-covering rally after the dips we saw at the start of the week," a fund source said.
As well as commodities, equity markets also bounced on Thursday, with mining, oil and financials among the biggest gainers.
"They (commodities) are bouncing at the moment, but we are not out of the woods yet," the fund source said.
On the LME, benchmark metal copper rose by 5.4 percent, or $360 a tonne, finishing at $6,990 a tonne. Prices had fallen by over seven percent since the close last week.
Commodities in general have been hit hard by investors' flight from risky asset classes - copper has lost as much as 25 percent from record highs of $8,800 in mid-May, while gold has shed as much as one fifth from its recent peak.
The stronger dollar, concerns about higher interest rates and uncertainty over global equity markets turned investors away from riskier assets.
Prices have been driven higher by rising demand from China, which consumes about a fifth or the world's copper, and lately by inflows of investment fund money in an effort to benefit from strong returns and diversify portfolios.
Analysts said US economic data would be in focus over the next week, giving clues about a possible economic slowdown.
"Having assessed recent inflation trends, market participants will now be focusing on the growth component to see if we are in fact losing ground here," analyst Edward Meir at Man Financial said in a daily note.
Sizeable advances were seen in other metals, with zinc rising $120, or 3.9 percent, to $3,070. Stocks in LME warehouses declined to hit a fresh-five year low of 230,325 tonnes, down by 2,550.
In contrast, aluminium inventories increased by 1,575 tonnes to 769,425. However, prices were pulled higher by the overall trend, finishing at $2,570, up $70.
Nickel leapt $750, or 4.1 percent, to $18,900, tin rose to $7,950 from $7,750, while lead was up $5 at $965.
Comments
Comments are closed.