Federal Reserve Bank in lower financial district, Manhattan. Stock Image.
Copper prices moved higher on Thursday after the US Federal Reserve cemented expectations that rapid interest rate rises will end soon, weakening the dollar and making dollar-priced metals cheaper for buyers with other currencies.
Copper for delivery in March rose on the Comex market in New York, touching $4.19 per pound ($9,218 per tonne), up 1.9% compared to Wednesday’s closing.
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A rapid softening in the dollar and hopes of revived demand in China after it lifted coronavirus controls have driven copper from about $7,500 a tonne in November to as high as $9,550.50 last month.
Demand shows little sign of improving, however, with Chinese import premiums falling and Shanghai exchange inventories increasing rapidly.
“Short term, I think you have to be moderately bearish,” said Dan Smith, head of research at Amalgamated Metals Trading.
But he said investors should buy the dips and forecast that prices would end the year above $10,000 a tonne.
“China’s going to come back strongly; we just haven’t felt it yet,” he said, adding that the weakening dollar and supply issues were also supportive for prices.
(With files from Reuters)
