LONDON: Copper prices touched their highest in a month on Wednesday as the dollar retreated on weaker than expected US labour market data that investors bet could give the Federal Reserve room to start cutting interest rates.
The data, ahead of a Fed policy decision at 1900 GMT, lifted copper after it had come under pressure from a contraction in Chinese manufacturing activity in January.
Three-month copper on the London Metal Exchange (LME) hit $8,704.50 per metric ton, its highest since Dec. 28, after the US data. It was last trading at $8,611.
US labour costs rose less than expected in the fourth quarter, leading to the smallest annual increase in two years, while the ADP National Employment Report showed private payrolls increased by a smaller than expected 107,000 jobs in January.
China’s manufacturing a“There’s no improvement in China’s manufacturing PMIs,” one copper trader said.
Copper stocks in LME-registered warehouses were at 146,475 tons, down 24% since October and at their lowest since September.
China’s demand for metals such as copper and aluminium still showed “surprising resilience”, said WisdomTree commodity strategist Nitesh Shah, citing record power grid investment and rising production of solar panels.
LME zinc dropped 1.5% to $2,525.5 a ton, aluminium edged up 0.1% to $2,276.5, nickel fell 1.8% to $16,210, lead was down 0.9% at $2,156.5 while tin gained 0.8% to $26,200.
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