Copper prices touched a five-month high Tuesday amid signs of stronger Chinese demand and lingering supply-side concerns.
The base metal jumped 2.21% to $6,167 a metric ton Tuesday. Gold, meanwhile, fell 0.31% to $1,250.50 a troy ounce.
The International Monetary Fund revised its growth outlook for China, the world’s largest copper consumer, up 0.1 percentage point to 6.7% late Monday.
“Economists have raised China GDP forecasts, that’s been steadily positive for sentiment and helps support prices, that’s one of the key drivers,” said Warren Patterson, commodities strategist at ING Bank.
The economic data came after China released figures on its copper imports earlier Monday, which increased in June month-on-month.
The recent Chinese data is, “the underlying big picture support, which has been simmering in the background,” said Robin Bhar, head of metals research at Société Générale.
On the supply side, Antofagasta PLC and Barrick Gold Corp.’s Zaldívar mine averted a strike overnight, but threats to supply still exist. Freeport McMoRan Inc.’s Grasberg mine in Indonesia, the second-largest copper mine in the world, entered its fourth month of strikes Monday, which helps further boost the base metal, Mr. Patterson said.
Gold prices were muted ahead of the U.S. Federal Reserve’s decision on interest rates Wednesday, where no changes are expected. A firmer dollar also pushed down on the precious metal.
The WSJ Dollar index, which compares the dollar against a basket of currencies, ticked 0.07% higher to 86.57. A stronger dollar makes dollar-denominated metals more expensive for holders of other currencies.
“It’s really just been a factor of the dollar,” Mr. Patterson said about gold prices.
Among precious metals, palladium rose 0.95% to $857.15 a troy ounce, platinum fell 0.38% to $928.80 a troy ounce and silver dropped 0.99% to $16.28 a troy ounce.
Among base metals, zinc rose 1.52% to $2,830.50 a metric ton, aluminum was up 0.52% to $1,922.50 a metric ton, tin fell 0.02% to $20,245 a metric ton, nickel jumped 1.84% to $9,940 a metric ton and lead gained 1.79% to $2,298 a metric ton.
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