London copper holds gains

Dhaka,  Wed,  07 December 2016
Published : 23 Nov 2016, 23:33:03

London copper holds gains

SYDNEY, Nov 23 (Reuters): London copper was little changed in Asian trade on Wednesday after overnight gains on signs of rising US inflation and further depreciation in the yuan.

Three-month copper on the London Metal Exchange rose 0.1 per cent from the late London session to $5,624 a tonne by 0700 GMT.

The most-traded copper contract on the Shanghai Futures Exchange slipped 0.3 per cent to 45,760 yuan  ($6,641)a tonne.

The dollar hovered near a recent 13 ½-year peak on Wednesday, taking a breather after surging on expectations that US interest rates will rise further than earlier anticipated due to prospects of increased fiscal stimulus under a Trump administration., leading to higher inflation.

Against a basket of six major currencies, the dollar last stood at 101.05 That was up from Tuesday's low of 100.65 and not too far from Friday's high of 101.48, which was the highest for the dollar index since April 2003.

Data on Tuesday showed US home resales rose in October to their highest level in more than 9-1/2 years, helping to support the greenback.

Copper is seen as a cheaper hedge against inflation than precious metals, while holding stronger upside potential.

However, traders at Argonaut Securities warned on Wednesday that while copper inventories on the London Metal Exchange continued to slide, down to an 11-week low, providing a positive fundamental outlook, SHFE inventories are up around 30 per cent since early November.
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