LONDON: Copper has climbed towards its key threshold of US$10,000 a tonne on the London Metal Exchange, after advancing last month on a weaker US dollar and relatively resilient demand.
The wiring metal gained 3% in August, and rose as much as 0.3% to US$9,928 a tonne yesterday.
A softer US dollar tends to benefit commodities priced in the greenback by making them cheaper for non-US buyers.
Copper last traded above US$10,000 in July, but has proved relatively resilient despite some forecasts for lower prices after US president Donald Trump stopped short of placing import tariffs on the most widely traded forms of the metal.
US copper futures are still trading at a premium over the London prices that are the global benchmark, and metal is still flowing to America.
The Bloomberg Dollar Index has softened as bets build on a US interest rate cut at the next Federal Reserve (Fed) meeting, and as investors grapple with Trump’s move to fire Fed governor Lisa Cook.
The greenback slipped further after a US court ruled many of his global tariffs as illegal.
Copper demand has been supported this year by reasonably strong activity in China.
Apparent consumption in the world’s biggest copper market rose by about 10% in the first half, according to Zijin Mining Group Co.
Still, there have been warnings of a more moderate outlook in the second half.
“Broad activity data in China appears to be weakening, and apparent consumption growth of copper and aluminium has slowed in recent months, in line with our expectations,” Goldman Sachs Group Inc analysts said in a note.
Copper is seen to have extreme value in construction industries, and which is why scrappers often strip wiring of its copper to resell it.
While the metal is not the most common of precious metals in investments, it is still widley considered a valuable component of an investment portfolio, and has for some time now.
While copper hit US$9,835.07 a tonne last month, it was trading at US$9,385.31 one year ago. — Bloomberg
