Copper rose to the highest price in almost four weeks on bets that the Federal Reserve will continue making asset purchases to support economic growth. Nickel reached a three-month high, and zinc jumped.
The Federal Open Market Committee today concludes a two-day meeting and probably will decide to continue buying $85 billion in securities each month, according to economists in a Bloomberg survey. A Commerce Department report today showed the U.S. economy unexpectedly shrank in the fourth quarter, bolstering speculation that the central bank will purchase more debt.
“The consensus is that the Fed is going to stay the course and that rates will remain low,” Matt Zeman, a strategist at Kingsview Financial in Chicago, said in a telephone interview. “The expectations for the Fed are feeding risk appetite.”
Copper futures for delivery in March rose 1.6 percent to settle at $3.75 a pound at 1:11 p.m. on the Comex in New York. Earlier the metal touched $3.7525, the highest since Jan. 3.
Rio Tinto Group, the world’s second-biggest mining company, is considering a temporary halt to construction work at its $6.2 billion Oyu Tolgoi copper and gold project in Mongolia as the government demands a greater share of profit from the mine, according to two people familiar with the plans.
On the London Metal Exchange, copper for delivery in three months gained 1.5 percent to $8,226 a metric ton ($3.73 a pound).
Also on the LME, nickel for delivery in three months climbed as much as 3.1 percent to $18,385 a ton, the highest since Oct. 5.
Zinc for delivery in three months jumped 2.9 percent to $2,155 a ton, the biggest gain since Jan. 2. Inventories of the metal used in stainless steel are down 0.8 percent in January, heading for the first monthly drop since August. Supplies “may be getting a bit tight,” Edward Meir, an analyst at INTL FCStone Inc. in New York, said in a telephone interview.
Lead, aluminum and tin also advanced in London.