LONDON- Copper prices rebounded on Friday after two days of losses, helped by US data showing cooling inflation and investors cancelling some bearish positions ahead of the weekend.
Three-month copper on the London Metal Exchange rose 1.1 percent to $8,663 per metric ton and the contract was up 2.5 percent on a weekly basis.
“I suspect we’re getting some end-of-week covering coming through. We’ve been getting short-covering rallies within an overall bear trend,” said independent consultant Robin Bhar.
Data on Friday showed US annual inflation logged its smallest increase in more than two years in June, raising hopes that the Federal Reserve is close to ending its interest rate hiking cycle.
The dollar index softened after the data, making dollar-priced metals less expensive to holders of other currencies.
“The Fed may not be ready to cut rates, but they also may not be ready to carry on tightening, so we could be looking at peak Fed rates and that is quite positive for metals,” Bhar said.
Pledges from the Chinese authorities to boost the country’s troubled property sector have also been fueling bullish sentiment.
But Bhar said the Chinese government is likely to offer only limited help, aiming to stabilize the property sector and not over-stimulate it. – Reuters
