Commodities got a fresh lease of life on Wednesday after China’s new leader Xi Jinping suggested that the world’s top metal consumer was seeking more effective policies to ensure stable economic growth.
Copper notched the highest in nearly seven weeks and gold clawed back from Tuesday’s nearly one-month low. Brent crude also witnessed modest gains.
The wider financial markets took support from comments that the Chinese government aimed to stabilise exports and make policies more targeted in 2013 to prop up growth.
However, many investors have remained cautious about the US budget crisis and are awaiting fresh news such as non-farm payrolls numbers in the world’s biggest economy, expected on Friday, and next week’s policy meeting of the Federal Reserve.
Three-month copper on the London Metal Exchange rose for a fifth straight session to touch an intra-day high of $8,074.75 a tonne, before easing to trade at $8,039.25 a tonne, up 0.1%. The metal has gained 7% since touching a low of $7,506 on November 9.
Gold climbed back above $1,700 an ounce on a broad-based demand for stocks as well as commodities on expectations of renewed Chinese focus on growth.
The confidence in the so-called safe-haven asset was also bolstered by a 14-tonne gold purchase by the central bank of South Korea.
Spot gold gained 0.3% to $1,701.94 intraday on Wednesday after dropping to $1,690.64 on Tuesday, its weakest since November 6. US gold February gold futures rose $8 an ounce to $1,703.80.
Similarly, brent crude oil rose 13 cents at $109.97 intraday, after losing nearly 1% on Tuesday, as optimism about stronger demand from China, the world’s second-largest energy user, gained pace, although investors remained still remained nervous about the US fiscal cliff. US crude also gained 21 cents to $88.71 a barrel.
