June 24 (Bloomberg) -- Copper climbed in London, leading gains in base metals, as the dollar fell on speculation the Federal Reserve will keep interest rates near zero for longer in order to support a recovery in the world’s largest economy. Three-month delivery copper rose as much as 2.6 percent to $6,684 a metric ton on the London Metal Exchange and traded at $6,663 at 11:34 a.m. in Shanghai. Aluminum increased as much as 1.5 percent to $1,970 a ton and tin advanced as much as 1.5 percent to $18,100 a ton. The U.S. currency weakened versus 11 of its 16 most-active counterparts after Fed officials said in their statement that falling prices for energy and other commodities were undercutting inflation. Metals, priced in the dollar, usually move counter to the currency. “The dollar seems to be holding its losses, which is bullish for metal prices in the short term,” Zhang Sida, an analyst at Dalu Futures Co. said from Shanghai today. “In the medium term, we don’t see any solid signs of demand improvement.” Copper, used in wires and pipes, is still almost 20 percent off an April peak on concerns that the global economic recovery may slow, hurting demand. Purchases of U.S. new homes fell in May to the lowest level on record after a tax credit expired, figures from the Commerce Department showed yesterday in Washington. Sales of existing houses, which make up about 90 percent of the U.S. market, slid in the same month while economists had predicted a gain. The U.S is the world’s second largest copper consumer and construction accounts for a quarter of demand. Copper for September delivery in Shanghai added as much as 1.5 percent to 53,900 yuan ($7,911) a ton and traded at 53,700 yuan by the midday break. Shanghai zinc jumped as much as 2.7 percent to 15,460 yuan and aluminum rose as much as 1.1 percent to 14,975 yuan. “Strong buying on the Shanghai Futures Exchange by small investors” lifted zinc prices, analysts led by Mark Pervan at ANZ Banking Group Ltd. said in an e-mailed report today. “Apparently the per-ton price is less than a third of copper, making the barriers to entry lower.” Lead was 1.1 percent higher at $1,834 a ton in London, nickel increased 1.7 percent to $19,600 a ton and zinc rose 1.2 percent to $1,852. --Li Xiaowei. Editors: Richard Dobson, Jarrett Banks. To contact the editor responsible for this story: James Poole at jpoole4@bloomberg.net

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