London copper prices rose on Tuesday, supported by a softer U.S. dollar following weak economic data, but trading volume stayed low due to a week-long holiday in top consumer China.
Three-month copper on the London Metal Exchange rose 2.2% to $7,673 a tonne by 0711 GMT, aluminium gained 2.6% to $2,276 a tonne, nickel advanced 2.2% to $21,715 a tonne and lead increased 1.3% to $1,886 a tonne.
“(Metals were) holding onto the gains from yesterday because of the dollar’s weakness… (but) demand for metals is expected to be low because of uncertainties, rising interest rates and de-industrialisation of the West,” said Zenon Ho, an analyst at broker Marex.
The dollar lost some support from a slide in Treasury yields overnight after data showed a slowdown in manufacturing, hinting that aggressive Federal Reserve rate hikes are already being felt.
A weaker dollar makes greenback-priced metals cheaper for holders of other currencies.
“Participation in Asia has dried up in the absence of Chinese traders, which has been helping to inject some calm. Markets would continue to move sideways this week,” Ho said.
The Shanghai Futures Exchange is closed until Oct. 7 for holidays.