The prices of copper and the aluminum rose at the open this Friday, driven by the weakness of the dollar and the shortage of inventories. Investors, however, worried that central bank interest rate hikes could dampen growth and demand for metals.
As reported by the Reuters agency, at 1100 GMT (06:00 am Peruvian time), three-month copper on the London Metal Exchange (LME) gained 0.1%, at $9,838.50 per ton, in on track for a rise of more than 3% this week.
The European Central Bank (ECB) was more aggressive than expected on Thursday, while the Bank of England also raised rates.
“The question people are asking is what kind of impact will it have on the economic outlook,” said Ole Hansen of Saxo Bank in Copenhagen.
A break in copper above $10,000 a tonne, breaking out of its $500 range, would attract buyers waiting on the sidelines, Hansen added. Volumes have been light due to the week of festivities in top metals consumer China.
“This concern about growth is preventing a rise in the market, where there is a strong appetite for raw materials, both from real buyers and from speculators and investors,” added the specialist.
Meanwhile, the dollar index was heading for its worst week in almost two years, while the euro tested highs not touched in almost three months, encouraged by the ECB’s turnaround. A weaker dollar makes greenback-denominated metals cheaper for buyers using other currencies.
In other base metals, aluminum on the LME was up 0.4% at $3,063.50 a tonne; zinc rose 0.6% to $3,618.50; lead gained 1.1% to $2,215.50; tin added 0.3% to $43,050; and nickel was stable at $22,865.
Source: Larepublica
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