Reuters.- Copper prices rose on Friday ahead of new U.S. inflation data, which could support future interest rate cuts, and as some traders bought futures after failing to break below key support.
At 1000 GMT, three-month copper on the London Metal Exchange (LME) was up 1.2% at $9,628 a tonne. The contract has fallen 4.4% in June and is on track for a sixth consecutive weekly decline.
“The tug-of-war in the base metals market right now is almost hypersensitive to rate cut prospects,” said Nitesh Shah of WisdomTree.
“The ECB and Switzerland have already cut and the question is when there will be enough cooling in inflation for the Federal Reserve to make a move. The data we have been receiving appears to be favorable, so rate cuts could come relatively soon,” he added.
The Fed’s preferred measure of inflation, the personal consumption expenditures (PCE) index, is due at 1230 GMT. If annual growth slows to 2.6% in May, as economists expect, it could pave the way for rate cuts later this year.
Copper was also buying after holding above a key support level of $9,480 on Thursday, one trader said. A break below that level could trigger further losses to $9,100.
After reaching an all-time high of $11,104.50 on May 20, copper prices have fallen 14%, partly due to weak economic data from China and uncertainty over rates in the United States.
In other base metals, zinc on the LME rose 1.1% to $2,963; aluminum gained 1.6%, to $2,531.50; nickel advanced 1%, to $17,280; lead improved 0.8%, to $2,197; and tin rose 3.2%, to $33,225.
