LONDON- Copper prices rose on Friday on a weaker dollar, some upbeat signs of recovery in top metals consumer China and as speculators reacted to bullish short-term technical signals.
Three-month copper on the London Metal Exchange gained 1.5 percent to $8,106 per metric ton, after hitting its highest since Oct. 10 at $8,122.5. The metal was on track to add 1.9 percent on the week, the strongest weekly performance in more than a month.
“From a short-term perspective, we’ve managed to hold above a very key area of support, which has given a little confidence back to the market,” said Ole Hansen, head of commodity strategy at Saxo Bank in Copenhagen.
LME copper has bounced after touching an 11-month low of $7,856 on Monday to nudge above the 21-day moving average on Friday, a bullish short-term trading signal.
“What was a pretty tough month has been somewhat mitigated by those announcements from China,” Hansen added.
Profits at China’s industrial firms extended gains for a second month in September, adding to signs of a stabilizing economy as the authorities launched a burst of supportive policy measures.
LME nickel gained 1.3 percent to $18,320 a metric ton, but was set for its biggest weekly decline in a month, pressured by a surplus in the global market.
“We forecast a surplus in the global nickel market in 2023 of 307,000 tons, expanding from the surplus of 126,000 tons seen in 2022,” BMI analysts said in a note.
However, LME nickel prices could rally to around $20,000 a ton on stretched fund short positioning, supply risks in top producer Indonesia, and potential further Chinese easing, Citi analysts said.
Also supporting metals was a weakening of the dollar index making greenback-priced commodities less expensive in other currencies.