Copper rose from a six-year low and most industrial metals gained after weaker-than-expected U.S. inflation curbed bets for an interest-rate increase next month.
Data on Wednesday showed U.S. consumer prices gained the least in three months, giving the Federal Reserve room to put off a rate increase. Minutes released Wednesday of the Fed’s latest meeting showed officials signaled concern about stubbornly low inflation.
Higher interest rates tend to strengthen the dollar, cutting the appeal of commodities as alternative assets. Loose monetary policy can also help to sustain economic growth. Traders see the likelihood of a rate rise next month at 34 percent, down from 48 percent on Tuesday, data compiled by Bloomberg show.
“With classic economics, you’d expect a continued easy money environment would benefit growth, which clearly helps base metals being an industrial component,” Tim Evans, the chief market strategist at Long Leaf Trading Group Inc. in Chicago, said by telephone.
Copper futures for December delivery rose 1.8 percent to settle at $2.3175 a pound at 1:16 p.m. on the Comex in New York. Prices gained for the first time this week after touching a six-year low on Wednesday.
Aluminum and nickel also slumped to six-year closing lows this week on concern that China’s slowdown was deepening. Ivan Glasenberg, chief executive officer of Glencore Plc, cited “aggressive” short-selling in China for the copper rout, and said prices weren’t reflecting fundamentals such as lower supply.
Copper for delivery in three months climbed 2.5 percent to $5,119 a metric ton ($2.32 a pound) on the London Metal Exchange, the biggest gain in a week. Also on the LME, aluminum, zinc, and lead rose, while tin and nickel dropped.