Copper rises to 4-1/2 month high after U.S. Fed stimulus
SOURCE:[Reuters]- Copper climbed to a 4-1/2 month high on Friday after the U.S. Federal Reserve launched a new round of aggressive stimulus that investors hoped would help bolster demand for industrial metals.
The rally in base metals echoed a rise in risk appetite across financial markets after the Fed said on Thursday it would pump $40 billion into the world’s largest economy each month until it saw a sustained upturn in the weak jobs market.
European equities traded higher and the euro rose to a four-month high against a broadly weaker dollar. A weak dollar makes commodities priced in the U.S. unit cheaper for holders of other currencies.
Three-month copper on the London Metal Exchange rose to $8,391 a tonne at 0928 GMT, up 4 percent from Thursday’s close of $8,075 a tonne. The metal used in power and construction earlier hit its highest level since early May at $8,408 a tonne.
“It’s clear that the markets have taken a very positive view on the Fed’s action last night, and we have seen a strong move up today in markets,” said Ross Strachan, economist at Capital Economics.
While traders and analysts expect a spike in base metal prices, they doubted if the rally could be sustained for long, as downstream copper demand in China remained sluggish.
“We would caution that we remain very skeptical of the longer-term implications of this. There is a likelihood that the price gains will not be sustained and prices will fall back again as the demand situation is still very poor.”
Lead rose to its highest level in more than six months, zinc hit its highest in six months, aluminium hit a 5-1/2 month high, while tin and nickel both hit 4-1/2 month peaks.
Copper is on track for a weekly increase of more than 4 percent, which would bring its gains over two weeks to over 9 percent, the biggest two-week rise since November last year.
Post from: Gold News from Gold Editor
Copper rises to 4-1/2 month high after U.S. Fed stimulus
2012-09-14 22:21:40
Source: http://www.goldeditor.com/copper-rises-to-4-12-month-high-after-u-s-fed-stimulus/
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