Prices of most base metals rose on Thursday on projections that the US interest rate hike cycle has come to an end, with cuts potentially starting in 2024.
Three-month copper on the London Metal Exchange rose 1.1 percent to $8,420.50 per metric ton while the most-traded January copper contract on the Shanghai Futures Exchange advanced 0.2 percent to 68,050 yuan ($9,536.15) a ton.
US central bank chief Jerome Powell said the historic tightening of monetary policy is likely over as inflation falls faster than expected, with a discussion of cuts in borrowing costs coming “into view.”
An interest rate cut could mean cheaper funding to help businesses grow and buy more metals. It also usually leads to a weaker dollar, which makes greenback-priced metals cheaper to holders of other currencies.
Also supporting copper prices has been mine closures and disruptions that have rapidly changed the landscape for copper supplies and prompted analysts to lower their forecasts for surpluses.
However, capping the rally in metals prices was top consumer China’s lack of announcement this week on large scale stimulus measures to prop up its economy. – Reuters
