Copper futures rose on speculation that the Federal Reserve won’t increase interest rates in the near term, bolstering prospects for metal demand in the U.S., the world’s second-biggest user.
Wholesale prices in the U.S. were little changed in August from the prior month, government data showed today. Muted inflation allowed the Fed room to keep rates low even as officials on pace to end unprecedented asset purchases in October. The dollar eased from a 14-month high against a basket of 10 currencies.
“Producer prices show a firmer confidence in the market as it reaffirms the Fed will maintain raising rates in a timely fashion,” Phil Streible, a senior market strategist at RJO Futures in Chicago, said in a telephone interview.
Copper futures for December delivery gained 0.3 percent to $3.096 a pound at 10:20 a.m. on the Comex in New York. The price dropped 0.7 percent yesterday, partly on concern that demand will ease in China, the top consumer.
The Fed will keep its main interest rate unchanged following a two-day policy meeting that ends tomorrow, economists surveyed by Bloomberg showed.
Copper for delivery in three months rose 0.3 percent to $6,842 a metric ton ($3.10 a pound) on the London Metal Exchange. Through yesterday, the price dropped 7.3 percent this year.
Aluminum and lead climbed in London, while nickel, zinc and tin dropped.