Commodity News
HeadLine : Copper jumps most in 2 years after Fed officials calm markets
Date : Aug 28 2015
Copper and zinc scored the biggest one-day gains in over two years on Thursday after comments by U.S. Federal Reserve officials helped calm global markets, including hard-hit stocks in top metals consumer China.

Speculators on the London Metal Exchange scrambled to buy back short positions after the recent downswing, traders said.

"We're seeing very little from the trade sector, so it's mostly screen-driven and money-based," one trader said.

"The market was very short, so with the Chinese equity markets taking a breather it's hardly surprising metals are going up," another trader said.

Equities rallied around the world on Thursday following comments by two Federal Reserve officials that prompted investors to push back forecasts for U.S. rate hikes, with China stocks snapping a savage five-day losing streak.

Sentiment was also buoyed by data that showed the U.S. economy grew faster than initially thought in the second quarter.

The lift helped distance copper from six-year lows of $4,855 plumbed this week on fears of a "hard landing" in China, which intensified after it devalued the yuan earlier in August.

Benchmark LME copper closed up 4.2 percent at $5,140 a tonne, the biggest one-day percentage gain since May 2013. The metal is down more than 18 percent this year.

With prices being tossed around on macro-economic themes, one can't say (copper) definitely won't fall but momentum to the downside has retreated. Speculators are more nervous about being short copper," said Vivienne Lloyd, an analyst at Macquarie.

China's central bank lowered interest rates and the amount of reserves banks must hold for the second time in two months this week in a move to boost its stuttering economy.

Aluminium failed to trade in closing open outcry activity and was last bid up 1.8 percent at $1,559 a tonne, also moving away from six-year lows hit earlier this week.

Zinc leapt 3 percent to $1,752 a tonne, the biggest one-day gain in over two years and moving away from its lowest price since 2010 of $1,673 hit in the previous session.

Data showed nearly a third of zinc stocks have been booked to leave LME registered warehouses

Nickel soared 5.1 percent to close at $10,060 a tonne, the biggest gain in over a year, and lead added 1.8 percent to $1,678. Tin bucked the stronger trend and dipped 0.4 percent to $13,890.
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