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Copper Advances for Third Day as Dollar's Drop Increases Investor Demand
Copper climbed for a third day as the dollar weakened, boosting demand for raw materials as alternative investments. Zinc and lead also advanced.
The three-month contract on the London Metal Exchange gained as much as 1 percent to $7,798 a metric ton and was at $7,790 at 1:03 p.m. in Singapore. Copper for December in Shanghai rose as much as 0.5 percent to 60,370 yuan （$8,988）.
“The Fed is expected to keep interest rates low during their meeting this week, which should put pressure on the dollar and support metals prices,” Zeng Chao, an analyst at Everbright Futures Co., said in an e-mail. “Trading this week will be marked by low volumes, with China out from Wednesday.”
Financial markets in China, the world’s largest metals user, are closed from Sept. 22 to Sept. 24 for the Mid-Autumn festival holiday. Factories and construction sites, which use copper for making pipes and wires, may close or run at a reduced rate.
The dollar fell against a six-currency basket, including the euro, on speculation that the Federal Reserve’s Open Market Committee will say at a meeting tomorrow it’s considering further measures to keep borrowing costs low. The dollar was at $1.3071 per euro from $1.3050 on Sept. 17, when it slid to $1.3159, the weakest level since Aug. 11.
“Metals are also benefiting from the rally in the agricultural market” as investors put more funds into commodity holdings as prices rise, said Wang Hongchuan, deputy general manager at Chongqing Xianrong Futures Brokerage Co.
Corn, which on Sept. 17 traded at more than $5 a bushel for the first time since 2008, extended its rally today. Futures in Dalian surged to a record. Cotton in New York jumped to the highest price in more than 15 years, trading at more than $1 a pound. Wheat and soybeans also gained today.
Aluminum in London increased 0.8 percent to $2,198.25 a ton, zinc climbed 2.3 percent to $2,199.75 a ton, lead advanced 1.3 percent to $2,231.75 a ton and nickel increased 1.1 percent to $23,460 a ton. Tin, which reached $23,800 a ton on Sept. 17, the highest level since July 2008, hadn’t traded as of 1:09 p.m. Singapore time.
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