METALS-Copper touches 3-week high on renewed worries about inflation
By Eric Onstad
LONDON, July 6 (Reuters) - Copper prices hit the highest in about three weeks on Tuesday as investors bought the metal as a hedge against inflation amid a surge in oil prices to multi-year peaks.
U.S. crude prices jumped to their highest since 2014 after OPEC+ producers fell out over plans to raise supply in the face of rising global demand.
"I think we're basically seeing a renewed focus on the reflation trade so I think that's why copper has seen a recovery during the past few days," said Ole Hansen, head of commodity strategy at Saxo Bank in Copenhagen.
Three-month copper on the London Metal Exchange CMCU3 had advanced 0.9% to $9,593 a tonne by 0935 GMT, its highest since June 16 and the third straight session of gains.
Hansen said speculators responded to a bullish technical signal when copper broke above its 21-day moving average, but he was wary that it would be able to surmount resistance of $9,850.
"I think that's probably the farthest we can go at this time because we're still going through a stage where the physical world is not really showing the tightness required to support a recovery back to where we were in May."
Copper has pulled back from its record peak of $10,747.50 touched in May, partly due to weak demand in top consumer China.
"The consumers are still standing away and other sectors of the trade are selling into rallies as they cannot see the justification for current price levels at this time of year," Malcolm Freeman of Kingdom Futures said in note.
* Traders awaited minutes due on Wednesday from the U.S. Federal Reserve's latest policy meeting, which is expected to provide insight into last month's hawkish shift in which Fed members projected a start to rate hikes in 2023.
* LME aluminium CMAL3 added 0.1% to $2,559 a tonne, zinc CMZN3 advanced 1.1% to $2,978, lead CMPB3 climbed 1.2% to $2,313, nickel CMNI3 rose 0.6% to $18,525 and tin CMSN3 rose 0.4% to $31,800 a tonne.
* For the top stories in metals and other news, click TOP/MTL or MET/L
(Reporting by Eric Onstad, Editing by Louise Heavens)
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.