Copper climbs to 1-week peak as dollar weakens

LONDON — Copper climbed to one-week highs on Tuesday as funds cut bets on lower prices and the dollar retreated from recent highs as the market waited for talks on the US-Chinese trade dispute.

Benchmark copper on the London Metal Exchange (LME) ended up 0.9% at $6,045 a ton. It earlier hit $6,076, its highest since Aug. 21. The metal, used in power and construction, is up nearly five percent since hitting a 14-month low at $5,773 last Wednesday.

“The dollar has come off and there is some easing of tensions between China and the United States,” a senior metals trader said. “If Chinese demand holds up then copper will stay firm around these levels, possibly a little higher.”

A weaker US currency makes dollar-denominated commodities cheaper for holders of other currencies, which could boost demand. This relationship is used by funds to generate buy and sell signals from numerical models.

US President Donald Trump said he does not expect much progress from trade talks with China this week in Washington and that he had “no time frame” for ending the dispute, which threatens to impose tariffs on virtually all goods traded between the world’s two largest economies.

China is the world’s largest copper consumer, accounting for nearly half of global demand estimated at 24 million tons this year. The US accounts for about eight percent of global demand.

Analysts say moves by China to support growth and investment should sustain growth in copper demand. Clues will come from surveys of purchasing managers in the manufacturing sector at the end of the month. China almost quadrupled the value of fixed-asset investment projects approved in July from the previous month as Beijing looked to accelerate infrastructure spending to stabilise the cooling economy. China’s banking and insurance regulator has asked financial institutions to give more support to infrastructure investment, importers and exporters, and creditworthy companies experiencing temporary problems.

Copper price resistance sits at $6,140 a ton, where the 21-day moving average and Fibonacci retracement level have converged. First support comes in at $6,000 followed by $5,773, last week’s low.

Aluminium ended little changed at $2,054.5 a ton, zinc climbed 3.6% to $2,462, lead added 1.8% to $2,008, tin rose 1.2% to $19,030 and nickel was flat at $13,560. —