Even as gold was set for its biggest annual slide in 32 years, base metal prices hit multi-month highs on Friday on brightening prospects of the economic recovery in top consumer China as well as the US. London copper prices hit their loftiest in more than four months in intraday trade, while zinc hit a ten-month high and lead rose to its highest since March, registering a broad-based rally in the base metal segment.
Having scaled its peak since mid-August to $7,410 earlier in the session, three-month copper on the London Metal Exchange (LME) eased a bit to rule at $7,390 a tonne by 1059 GMT, still up 1.5%. After a two-day holiday, the LME resumed trading on Friday. Prices of the industrial metal, considered a gauge for the state of the global economy, are heading for a near 5% rise in December ? their sharpest monthly gain since September last year.
Investors wagered on the metal after reports by China?s official Xinhua agency suggested that the country?s economic growth could beat the official estimate of 7.5% to hit 7.6% this year, coming as they are after the US economy expanded by 4.1%, its fastest in seven quarters, in the three months through September.
China is the world?s biggest consumer, making up for roughly 40% of global demand for refined copper.
A rally in the stock markets following the announcement of the US tapering, which reflected the Federal Reserve?s confidence in a sustained recovery of the world?s largest economy, also lent bullishness to the metal.
In mid-November, copper prices, however, had dropped below the $7,000-a-tonne level in mid-November after holding in a $7,000-$7,400 level since August, especially due to apprehensions about the US tapering as well as Chinese growth.
Analysts said copper prices now are also being aided by supply constraints due to falling stocks at the LME.
