Copper rose in New York and London as a weaker dollar stoked demand for industrial metals as an alternative investment. The U.S. Dollar Index, a six-currency gauge of the greenback’s strength, dropped as much as 0.7 percent amid reduced concern that the Federal Reserve’s bond-buying program will fall short of expectations. Copper yesterday slid the most since July 16 in London after posting the biggest advance in two weeks on Oct. 25. “Markets will likely remain choppy, taking their lead from moves in the dollar,” said Daniel Major, an analyst at RBS Global Banking & Markets in London. December-delivery copper gained 2.45 cents, or 0.6 percent, to $3.80 a pound at 7:48 a.m. on the Comex in New York. Prices yesterday reached $3.90, the highest level since July 7, 2008. Copper for delivery in three months climbed 0.5 percent to $8,342 a metric ton on the London Metal Exchange. A slumping dollar makes metals priced in the currency cheaper in terms of other monies. The greenback dropped today after the Fed asked dealers for projections of central bank asset purchases over the next six months. The dollar index posted a fifth weekly drop in the week ended Oct. 15 as copper advanced for a fifth week in a row. Miners to Strike? “Possible industrial action in Chile, combined with more potential news flow surrounding the new ETFs, is underpinning what is already a bullish sentiment toward” copper, Major said, referring to exchange-traded funds. Workers at Anglo American Plc and Xstrata Plc’s Collahuasi copper mine in Chile are prepared to continue wage negotiations after rejecting a company offer yesterday, a union official said. Chile is the world’s largest copper-producing country. The mine, the fourth-biggest in the world, produced 525,000 tons of copper last year. That equated to 3.2 percent of global output, according to RBS’s Major. BlackRock Inc., the world’s biggest money manager, plans to introduce an exchange-traded product backed by copper, according to a filing on Oct. 26 to the U.S. Securities and Exchange Commission. JPMorgan Chase & Co. plans a similar ETP, according to an Oct. 22 SEC filing. ETF Securities Ltd. said on Oct. 11 it aimed to start ETPs backed by six industrial metals. More Confident European confidence in the economic outlook improved more than economists forecast to the highest in almost three years in October, led by manufacturing sentiment. An index of executive and consumer sentiment in the 16 euro nations rose to 104.1 from 103.2 in September, the European Commission said. LME copper stockpiles fell 0.2 percent to 368,025 tons, exchange figures showed. Orders to draw copper from LME inventories jumped 6.6 percent to 29,250 tons, the highest level since Sept. 17. Cash copper’s discount to the three-month contract shrank to $5.50 a ton yesterday, the narrowest intraday level since Oct. 12, according to LME data. The discount was at $20 a week ago. Zinc for three-month delivery on the LME fell 0.5 percent to $2,498 a ton and lead declined 1.3 percent to $2,512 a ton. Prices this week reached the highest levels since January after China’s Shenzhen Zhongjin Lingnan Nonfemet Co. suspended output at its biggest smelter of the metals on Oct. 21. Tin added 0.9 percent to $26,275 a ton. Prices reached a record $27,338.50 on Oct. 14. The metal has jumped 55 percent this year, leading gains on the LME, after production was disrupted in Indonesia and the Democratic Republic of Congo. Aluminum rose 0.8 percent to $2,341 a ton and nickel gained 0.9 percent to $23,015 a ton. To contact the reporter on the story: Anna Stablum in London at astablum@bloomberg.net. To contact the editor responsible for this story: Claudia Carpenter at ccarpenter2@bloomberg.net.

Source