Copper soars more than 5% to highest value in four months

The red metal closed at US$ 1.78, after skyrocketing on announcements made yesterday by the United States Federal Reserve.

19 de Marzo de 2009 | 13:09 | ValorFuturo / REUTERS

LONDON.- Copper closed with a significant rise of 5.08% today at the London Metal Exchange (LME), after trading for US$ 1.78262 per pound, compared to US$ 1.69644 on Wednesday and US$ 1.70596 on Tuesday.

Today's value is the highest for the red metal since November 10th of 2008, when it traded for US$ 1.81664.

As a result, the monthly average climbed to US$ 1.64735, while the year average rose to US$ 1.52386.

Announcements made yesterday by the United States Federal Reserve reportedly boosted hopes that the demand for copper would recover.

Industrial metals were also helped by a weaker dollar. The U.S. currency suffered its most significant daily drop since 1985, after investors accepted the Federal Reserve's plan to buy long-term bonds from the U.S. Treasury, bringing back a practice that has not been used in decades.

A weak U.S. currency makes metals that are priced in dollars less expensive for those possessing other currencies.

"Everything seems to be driven by what happened yesterday in the United States, with the Federal Reserve's decision to inject dollars", stated Marc Elliot, who is an analyst for Fairfax investment bank. "It is a combination of that and a weaker dollar", he added.

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