LONDON- Copper prices in London hit their highest in more than three weeks on Friday, on course for the first weekly gain in seven weeks, with the outlook for US interest rates supporting sentiment towards growth-dependent metals.
Three-month copper on the London Metal Exchange (LME) rose 0.7 percent to $9,946 a metric ton, after hitting $10,000 for its highest since June 12 and testing resistance from its 50-day moving average at $9,993. The contract is up 3.6 percent this week.
US Comex copper futures gained 2.4 percent to $4.64 a lb as some players bought back bearish, or short, positions to reduce their exposure due to expected shipments of copper failing to arrive in the United States.
US job growth slowed marginally in June, but a rise in the unemployment rate to more than a 2-1/2-year high and moderation in wage gains pointed to an easing of labor market conditions that keeps the Federal Reserve on track to start cutting interest rates this year.
“We believe the Fed’s interest rate path will continue to drive copper’s short-term price outlook,” said ING commodities analyst Ewa Manthey. “But if US rates stay higher for longer, this would lead to a stronger US dollar and weaker investor sentiment, which in turn would translate to lower copper prices.”
