Copper Gains on Optimism for China's Economy
Copper prices advanced Monday amid improved sentiment over China's economy, despite recent data from the country that disappointed analysts.
The industrial metal gained 0.59% to $5,602 in midmorning London trading.
Gold prices were also up, with the precious metal's spot price increasing 0.04% to $1,229.30 a troy ounce as the dollar weakened. The WSJ Dollar Index, which measures the dollar against a basket of currencies, was recently 0.16% lower at 89.99.
Copper's rise built on improvements from late last week after having previously given up its entire 2017 gain.
Chinese data released overnight, including for industrial production and retail sales for April, came in below expectations, according to commodities broker Marex Spectron. But industrial metal markets "ignore the data and all rally, opening London deep in the black," Marex Spectron analysts wrote in a note Monday.
"Some of the cynicism around China is ending," explained Nitesh Shah, a commodity strategist at ETF Securities.
Mr. Shah pointed to fresh liquidity injections into the Chinese economy, which have eased some monetary pressures, as well as a recently announced trade deal between China and the U.S. The agreement, Mr. Shah said, has lifted the morale of the commodities complex in general.
Traders were looking ahead to Chinese housing price data later this week, which could impact the price of copper and other base metals used in construction.
Gold's slight uptick was largely an "aberration" because "the dollar has come off a little bit," Mr. Shah said.
Gold is likely to remain under pressure over the next few months because it has priced in an expected interest rate increase by the U.S. Federal Reserve in June. However, experts don't expect prices to fall dramatically because of ongoing geopolitical risk, including rising tensions between the U.S. and North Korea.
Among precious metals, silver was up 0.70% to $16.57 a troy ounce, platinum was up 0.61% to $927.75 a troy ounce, and palladium rose 0.50% to $810.60 a troy ounce.
Among base metals on the London Metal Exchange, aluminum was up 0.90% to $1,902 a metric ton, lead rose by 0.82% to $2,141.5 a metric ton, tin increased 0.28% to $19,880 a ton, zinc climbed 0.86% to $2,573 a ton, and nickel rose 0.53% to $9,080 a metric ton.
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(END) Dow Jones Newswires
May 15, 2017 05:32 ET (09:32 GMT)