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US copper up as lower dollar offsets demand fears-2017 China(Guangzhou)Int’l Non-Ferrous Metal（Copper）Exhibition
8/4/2016 有色金属展-铜材展-non-ferrous metals expo |
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Reuters reported that copper prices rose as the lower dollar triggered a flurry of buying, but surveys of manufacturers around the world indicating slow activity dampened sentiment and limited gains.
Benchmark copper on the London Metal Exchange was untraded at the close, but bid up 0.2 percent at $4,890 a tonne. The metal used in power and construction earlier hit $4,959, near the one-week high of $4,965 seen on Monday.
Traders said that copper''s gains accelerated in afternoon trade after the dollar dropped to a six-week low against a basket of currencies, pressured by expectations the Fed would delay raising interest rates after recent soft US economic data.
A lower US currency makes dollar-denominated metals cheaper for holders of other currencies, a relationship used by funds to generate buy and sell signals.
British manufacturers slammed on the brakes last month after the Brexit vote and growth eased in the euro zone, surveys indicated, with factories in China, Japan and elsewhere in Asia offering only crumbs of comfort.
Recent US data suggests tepid economic growth, slowing manufacturing activity and subdued inflation.
Canto Fitzgerald analyst Asa Bridle said that "The US central bank seems to be continuously pushing back the decision to raise interest rates. We''re in a low interest rate environment and that is normally positive for metals and other commodities."
Analysts said that activity in metals markets could be muted for some months unless Chinese industrial production and investment data later this month throws up a surprise. Three-month aluminium closed down 0.6 percent at $1,625 and zinc added 0.3 percent to $2,275.
Zinc prices are up more than 40 percent since the start of the year on expectations of a market deficit due to mine closures.
Survey said that the global deficit for zinc - a metal mostly used for galvanizing steel - for 2016 is expected to come in at 221,000 tonnes this year.
Mr Guy Wolf, global head of market analytics at broker Marex Spectron, said that "Zinc is a positive story, but the trade is overcrowded, you might soon see some of those long positions being flushed out."
-2017 China(Guangzhou)Int’l Non-Ferrous Metal（Copper）Exhibition
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