Copper at one month high

All base metal prices rise as dollar slips

Copper prices rose to a year high level Comex on Tuesday, 08 September, 2009. Prices rose due to the weak dollar which increased the appeal of commodities as a hedge against inflation. Prices also rose as Goldman Sachs increased its price forecast for copper.

At USA, copper futures for December delivery rose 8.95 cents (3.1%) to 2.956 a pound. Copper fell 2.8% last week. Copper ended August, 2009, higher by 7%.

On the London Metal Exchange, copper for delivery in three months ended higher by $151 (2.4%) at $6,475 a metric ton. On 3 July, 2008, prices had touched an all time intra day high of $8,940.

After August, it was the eighth straight monthly gain for copper. Prices gained 23% in the second quarter. On a year to date basis, prices are higher by 94%.

The U.S. buys about 13% of the 17 million metric tons of copper sold annually and China buys about 20%.

In the currency market today, The U.S. dollar fell to a new yearly low versus the euro and tumbled versus other major rivals, undercut as investors continued to show rising appetite for risk. The dollar index, which measures the strength of dollar against a basket of other currencies, fell by 1.2%.

In its latest report, Goldman Sachs reported that it has forecast copper to reach $7,650 a ton at the end of 2010.

In FY 2008, copper prices dropped by 54%. Prior to 2008, copper prices ended FY 2007 with a gain of mere 5.5% after a whopping 44% gain in FY 2006. The price of copper gained every year since 2002 as global economic growth boosted demand for the metal used in pipes and wires.

At the MCX, copper for November delivery closed at Rs 315.8/Kg. The closing price was Rs 4.75/Kg (1.52%) higher than previous closing price. Prices rose to a high of Rs 319.2/ Kg and fell to a low of Rs 309.75/Kg during the day's trading.

Among other metals traded in the LME on Tuesday, lead rose 4.5% to $2,455 a ton and zinc gained 2.6% to end at $1,955 a ton. Nickel rose 2.9% to end at $18,200. Aluminium rose 1.6% at $1,895 a ton.