Copper rose to a six-week high on speculation that a European Central Bank plan to buy bonds will help stem the region’s debt crisis, improving prospects for metal demand.
A proposal from ECB President Mario Draghi involves unlimited purchases of government debt that will be sterilized, which ensures a neutral impact on the money supply by removing funds from elsewhere in the banking system, two central bank officials briefed on the plan said. Draghi will announce tomorrow whether the plan has been adopted.
“Markets like what they are hearing, with copper in the lead,” Edward Meir, an analyst at INTL FCStone Inc. in New York, said in a report.
Copper futures for December delivery gained 1.7 percent to settle at $3.529 a pound at 1:24 p.m. on the Comex in New York. Earlier, the price reached $3.534, the highest for a most-active contract since July 19.
The dollar’s decline against a basket of major currencies boosted the appeal of copper as an alternative investment.
Inventories of the metal monitored by the London Metal Exchange declined 1.7 percent to 215,050 metric tons, the lowest since October 2008.
Earlier, copper slid as much as 0.6 percent on signs that global metal demand will ebb after expansion in Australia’s gross domestic product slowed.
On the LME, copper for delivery in three months gained 1.3 percent to $7,735.50 a ton ($3.51 a pound). Aluminum, nickel, tin, lead and zinc also rose.
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