Copper snapped a part of its earlier gain on Friday following the decision by the United States Federal Reserves (US Fed) to keep interest rate unchanged after two days of brain storming sessions. Copper price declined by a marginal 0.7% to $5,352 a tonne on the benchmark London Metal Exchange (LME) following US Fed's comment on weaker global economy which feared growth in demand going forward. On Thursday, supply disruptions from the world's leading mines - Codelco and Antofagasta Plc - due to massive earthquake in Chile triggered copper to hit two-month high. Both mines reported restoration in their operations on Friday which also supported weak sentiment in base metals. "Fed took a view that the global economy is not doing good and therefore, it did not raise interest rate. This gave a signal that base metals' demand would remain sluggish due to weaker global economy. Since base metals are closely linked with the overall macro-economic sentiment, its demand depends upon the growth in global economy. Beyond that, however, fundamentals remained unchanged. The production disruption on mines in Chile due to the earthquake was also normalised," said Gnanasekar Thiagarajan, Director, Commtrendz Research. Earlier, speculation was rife that the US Fed would clear the market uncertainty and raise interest rate for the first time in many years on satisfactory recovery in the US economy. But, the Fed's decision to hold interest rate unchanged between 0 and 0.25% disappointed market participants which triggered a partial profit booking in base metals on Friday. In fact, Fed's observation of "weaker global economy", kept traders nervous over demand of base metals from infrastructure and housing sectors, the two largest consumer industries of copper. Meanwhile, China's slowdown hits demand of base metals in traditional sectors such as housing and heavy industries. The world's second largest economy after the US, had proposed massive investment in solar and wind power which could drive metals' demand. Among other base metals, zinc and nickel declined by 1.5% and 1.7% on surplus availability. By contrast, bullion got support from Fed's decision. Gold jumped by $5.2 from previous close to trade at $1137 an oz in London. Silver also moved in tandem to trade with a gain of $0.16 to trade at $15.26 an oz in early afternoon London trader. In India, however, the gain in bullion was capped due to strengthening rupee against the dollar. Following the Fed's decision to hold interest rate unchanged, the Indian rupee gained its highest in percentage term in two years to close at 65.67 against the dollar on Friday as against 66.46 the previous day. Gold was quoted at Rs 26540 per 10 grams in Zaveri Bazaar here after opening at Rs 26,430 per 10 grams. "Overall sentiment looks negative for long term in bullion as the US Fed casts a shadow on its future demand. But, for a short term, a marginally improvement cannot be ruled out," said Kumar Jain, Director, Umedmal Tilokchand Zaveri.

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