Copper futures posted the biggest gain in almost three weeks on speculation that demand will rise in China, the world’s biggest consumer of industrial metals, as new leaders take steps to boost the economy.
Pressure is mounting on China’s officials to expand stimulus as they start a once-a-decade power transfer on Nov. 8 after the economy slowed for seven quarters in a row. Copper also gained as the dollar fell against a basket of major currencies, increasing the appeal of the metal as an alternative investment.
“People are thinking the Chinese leadership change may mean more aggressive policy measures” on the economy, Harry Denny, a broker at Hoboken, New Jersey-based PVM Futures Inc., said in a telephone interview. “With the new leadership, we may see more of the infrastructure projects that a lot of people had expected in the third quarter.”
Copper futures for December delivery gained 1 percent to settle at $3.506 a pound at 1:24 p.m. on the Comex in New York, the biggest gain for a most-active contract since Oct. 17. Yesterday, the price touched $3.4485, the lowest since Sept. 5.
“I suspect the market will shift to focusing on political and economic developments in China,” Nic Brown, the head of commodity research at Natixis SA in London, said in an e-mail. “We’re starting to see signs of recovery in Chinese data, which might be expected to strengthen further once the new political team finally takes its place.”
On the London Metal Exchange, copper for delivery in three months rose 0.7 percent to $7,700 a metric ton ($3.49 a pound). Aluminum, nickel, lead, zinc and tin also gained.
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