LONDON: Copper prices climbed to two-week highs on Monday after the dollar fell on expectations of interest rate cuts in the United States and as the market awaited the outcome of the US Presidential election this week.
Benchmark copper on the London Metal Exchange (LME) traded 0.6% higher at $9,630 a metric ton in official rings from an earlier session high of $9,723.50 a ton.
The US Federal Reserve is forecast to cut interest rates by 25 basis points at its meeting on Nov. 6-7, according to analysts who expect further reductions over the coming months.
This is pressuring the US currency. When it falls, it makes dollar-priced metals cheaper for buyers holding other currencies and supports demand.
Traders said much of copper’s rise on Monday was because of buying by funds that trade on buy and sell signals from numerical models. Physical traders also said sentiment was positive and the focus was on the US election.
Polls show Kamala Harris and Donald Trump running neck and neck nationally and in the battleground states expected to decide the winner of the US election, though the closeness of the contest means it could take days for a winner to emerge.
Manufacturing activity in top consumer China swung back to growth in October as an expansion in new orders led to a pick-up in production growth, signalling improvement in the sector. Base metals markets are also hoping a meeting of China’s top leaders over Nov. 4-8 will decide on stimulus to spur growth.
Weighing on sentiment, however, the Yangshan premium a closely watched indicator of China’s appetite for importing copper - was down 30% at $48 a ton since climbing close to $70 in early October. In other metals, aluminium gained 0.3% to $2,608.5 a ton, zinc fell 0.8% to $3,045, lead slipped by 0.4% to $2,046 while tin advanced 1% to $32,055 and nickel retreated by 0.1% to $15,930.
Comments