BEIJING: Copper prices in Shanghai rose on Monday as the US dollar weakened and inventories fell, although a hazy near-term demand outlook capped the gains.

The most-traded January copper contract on the Shanghai Futures Exchange closed day-trading 0.8% higher at 66,040 yuan ($9,481.01) a tonne.

The London Metals Exchange is closed on Monday for the Christmas holiday.

The dollar slid against most currencies on Friday after data signalled that the US economy is cooling a bit, reinforcing expectations of smaller interest rate increases from the Federal Reserve and improving investors’ risk appetite.

On Monday, the dollar index slid 0.09% to 104.19. A weaker dollar makes the greenback-priced commodity more attractive for non-dollar buyers.

Meanwhile, copper inventories in SHFE warehouses fell 14.8% on Friday to 54,569 tonnes.

Copper stocks in bonded warehouses in Shanghai and Guangdong, however, stood at 49,600 tonnes on Dec. 23, up from 26,600 tonnes one month ago, according to according to information provider Shanghai Metals Market (SMM).

The data came after a drop in import activities as copper buyers were cautious in buying raw materials because of lasting soft demand, a trader said.

Customs clearance in Shanghai slowed down due to rising COVID-19 cases, SMM said, adding that it expects lower imports because of LME’s shut of trade on Monday and Tuesday.

Raising hopes of policy support, a top advisor to the People’s Bank of China on Saturday called for strengthening of real estate policy in light of sluggish economic growth over the past several years.

SHFE aluminium gained 0.5% to 18,715 yuan a tonne, zinc rose 1.6% to 23,520 yuan, nickel was up 1.1% at 218,690 yuan, and tin added 0.7% to 197,940 yuan.