Copper Prices Soar on Weaker Dollar and China's Economic Boost

Copper prices rebounded on Friday, driven by a weaker dollar and China's pledge to boost economic growth through fiscal policy measures. The benchmark three-month copper contract on the London Metal Exchange gained 1.4% to $14,233 per metric ton in official trading. This comes after copper hit a six-month high of $14,396 earlier this week due to concerns about low inventories outside the US.

The dollar's decline makes dollar-priced metals more attractive for buyers using other currencies, while China's yuan reached a 3-1/2-year peak against the dollar. The Yangshan copper premium, a gauge of China's appetite for importing copper, rose 7% to $93 per ton. Copper inventories in Shanghai Futures Exchange warehouses jumped 28% this week.

The US Treasury's efforts to calm bond markets may have undermined confidence in the dollar, with investors questioning their impact on currency value. China's Vice Finance Minister Liao Min announced a greater share of fiscal spending will be directed towards households and consumption to shore up weak domestic demand. Other metals, including zinc, aluminium, lead, tin, and nickel, also saw price gains.