Copper rose in London, narrowing a weekly drop, as traders bought metal to close out bets on lower prices amid prospects for a stronger world economy.
Global growth is poised to accelerate to 2.8 percent next year, according to economists surveyed by Bloomberg. A gauge of U.S. leading economic indicators increased more than forecast in November, data showed yesterday. The Federal Reserve said this week it will slow monthly debt-buying further if the economy improves as forecast.
“The speculative part of the market is mostly short base, so short-covering has been driving prices higher,” Jesper Dannesboe, a senior commodity strategist at Societe Generale SA in London, said by e-mail today. “Increasing optimism on global growth for next year, led by the U.S.,” helped to stoke purchases, he said.
Copper for delivery in three months gained 0.6 percent to $7,245 a metric ton by 11:25 a.m. on the London Metal Exchange, cutting this week’s slide to 0.1 percent. Prices retreated 8.6 percent this year. Copper for delivery in March rose 0.5 percent to $3.311 a pound on the Comex in New York.
The Fed will probably reduce its bond purchases in $10 billion increments over the next seven policy meetings before ending the program in December 2014, economists in a Bloomberg survey said. The central bank unveiled a $10 billion reduction to $75 billion on Dec. 18.
Copper stockpiles monitored by the LME, at the lowest since February, fell for a 35th session to 382,550 tons, daily data showed. Orders to withdraw the metal from warehouses dropped to 253,075 tons, down 33 percent from the 2013 high in June.
The central bank in China, the biggest copper consumer, conducted short-term liquidity operations recently, it said on its microblog yesterday, without giving details of the recipients, amount or rate charged for the financing. Calls to the central bank’s press office went unanswered.
Nickel for delivery in three months climbed 1.3 percent to $14,370 a ton in London, set for a third weekly gain, the longest run of advances in four months. Zinc headed for the highest close since Feb. 28. Tin, lead and aluminum advanced.
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