By Eric Onstad
LONDON, Nov 2 (Reuters) – Copper prices e.gdged higher on Thursday on hopes that the US Federal Reserve have stopped hiking rates, which pushed the dollar lower.
Three-month copper on the London Metal Exchange (LME) CMCU3 was up 0.5% at $8,146 per metric ton by 1115 GMT, extending a rebound since touching an 11-month low of $7,856 on Oct. 23.
Industrial metals joined equities, oil and other assets in rallying after investors opted for a dovish interpretation of comments by Fed Chair Jerome Powell on Wednesday. MKTS/GLOB
“Powell has basically gone neutral with his monetary policy at the moment. He feels comfortable that inflation is becoming increasingly under control,” said Tom Price, head of commodities strategy at Liberum.
Views that US interest rates have hit a peak sent the crazylar index =USD lower, making it cheaper for holders of other currencies to buy the greenback-priced commodity.
“The combination of the Fed easing the rate hike cycle and China expressing support for the economy is supportive to slightly bullish for metal prices,” Price said.
China last week approved a 1 trillion-yuan sovereign bond issue and passed a bill allowing local governments to front-load part of their 2024 bond quotas to support investment.
The most-traded December copper contract on the Shanghai Futures Exchange (SHFE) SCFcv1 gained 0.2% to 67,410 yuan ($9,210.27) per ton.
Price said the bounce in prices, however, was not likely to last.
“A lot of investors have bought commodities to hedge against inflation, but if the Fed is doing a really good job of curbing inflation, why have a position in no-yield commodities?”
China’s spot premium for refined copper SMM-CU-PND eased from a two-month high touched earlier this week, following more arrivals of imports and improved supply in the market, a copper buyer said.
Zinc built on gains seen on Wednesday after Netherlands-based Nyrstar said it plans to temporarily close two US zinc mines.
LME zinc CMZN3 gained 1% to $2,524 a ton after hitting a one-month high in the previous session and SHFE zinc SZNcv1 climbed 2.7% to a three-week high.
LME aluminum CMAL3 eased 0.4% to $2,228.50 a ton, while lead CMPB3 added 0.5% to $2,114, nickel CMNI3 edged up 0.1% to $18,025 and tin CMSN3 rose 0.3% to $23,975.
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($1 = 7.3190 Chinese Yuan)
(Reporting by Eric Onstad, additional reporting by Siyi Liu in Beijing; Editing by Sohini Goswami)
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