Aug. 30 (Bloomberg) -- Copper advanced to a three-week high in New York on speculation that U.S. economic growth will spur demand for industrial metals.
Home prices in the U.S., the world’s second-largest copper user, showed signs of stabilizing in June, according to data released today. The S&P/Case-Shiller index of property values in 20 cities fell 4.5 percent from June 2010, after dropping 4.6 percent in the 12 months ended in May. Copper is used in wiring and plumbing. Consumer spending rose more than forecast in July, showing the biggest part of the economy is holding up.
“The fact that some key U.S. macro numbers have come in much stronger than expected seems to have quieted recession talk for the time being,” Edward Meir, a senior analyst at MF Global Holdings Ltd. in Darien, Connecticut, said today in a report.
Copper futures for December delivery rose 3.2 cents, or 0.8 percent, to close at $4.1415 a pound at 1:31 p.m. on the Comex in New York, after reaching $4.192, the highest for a most- active contract since Aug. 5.
Prices have gained 21 percent in the past year, touching a record $4.6575 on Feb. 15, as demand surged in China, the world’s biggest consumer.
Copper is the way “electricity gets transmitted and consumed, and the electrification of China is not a gamble,” Steve Shafer, who helps manage $300 million as chief investment officer of Oklahoma City-based Covenant Investors, said in an interview last week in New York. “Copper will be the most important commodity in the next decade.”
In the next 12 months, “the risk associated with the European debt crisis” and “perceived weakness” in global growth may “create a window of opportunities to accumulate copper,” Shafer said. “Higher prices are baked in the cake.”
On the London Metal Exchange, copper for delivery in three months gained $85, or 0.9 percent, to $9,160 a metric ton ($4.15 a pound). The market was closed yesterday for a holiday.
Aluminum, lead, nickel, zinc and tin also rose in London.
--With assistance from Debarati Roy in New York. Editors: Daniel Enoch, Steve Stroth.
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