Copper futures rose the most in nine weeks on optimism that U.S. lawmakers will reach a deal to avoid automatic tax increases and spending cuts in January that are forecast to curb economic growth.
President Barack Obama said Sunday that he is confident an agreement can be reached to avert the so-called fiscal cliff. The U.S. is the world’s second-largest copper user. The commodity also gained after a report showed house prices in China, the top metal consumer, climbed in more cities last month.
“The worst of the impact of the fiscal cliff will be averted come January, and that’s getting a bit of risk appetite back into the market,” Bart Melek, the Toronto-based head of commodity strategy at TD Securities, said in a telephone interview. “The market is less scared. It looks like things are unfolding a little quicker than people expected” on a deal, he said.
Copper futures for March delivery climbed 2.2 percent to settle at $3.5365 a pound Monday on the Comex in New York, the biggest increase for a most-active contract since Sept. 14.
The dollar fell as much as 0.6 percent against a basket of major currencies, boosting the appeal of commodities as an alternative investment.
On the London Metal Exchange, copper for delivery in three months rose 2.6 percent to $7,804 a metric ton ($3.54 a pound). Nickel, tin, aluminum, zinc and lead also gained.
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