By Katherine Dunn
LONDON--Metals prices rose Thursday alongside other commodities, spurred by dovish statements on the timing of future interest rate increases by the U.S. Federal Reserve.
The three-month London Metal Exchange copper price rose 0.74% in midmorning trade to $5,933 per metric ton, and the spot gold price rose 0.52% to $1,226.33 a troy ounce. Both prices were more than one-week highs.
On Wednesday, the Federal Reserve raised rates for the first time this year and penciled in two more rate increases in 2017, roughly in line with what was expected.
"The market liked that," said Robin Bhar, a commodities analyst in London at Société Générale.
The Fed statements pushed down the dollar and bond yields and lifted stocks, which helped spur price gains for both base and precious metals, which are priced in dollars. The guidance also helped gold prices, which would likely have been under pressure if the Fed had indicated the timing of rate increases could be faster than expected.
"With the Fed focus now fading gold is likely to stabilize with stock market gains offsetting geopolitical risk demand," said Ole Hansen, head of commodity strategy at Saxo Bank, in a morning note.
On Wednesday, Dutch voters rejected far-right candidate Geert Wilders, but traders and investors are now looking ahead to key elections in France and Germany.
Meanwhile in the copper markets, supply concerns continue to linger, helping to support prices.
In Chile, a labor strike at BHP Billiton Ltd.'s Escondida copper mine, the world's largest, is now in its second month. Workers at another mine in Peru, Freeport-McMoRan Inc.'s Cerro Verde mine, are also striking, while the company is locked in a dispute over an export license in Indonesia, over its Grasberg copper mine.
The other base metals were also higher on Thursday. Aluminum was up 1.25% at $1,911 per metric ton, lead was up 0.51% at $2,270 per ton, zinc was up 1.12% at $2,855.50 per ton, nickel was up 0.68% at $10,325 per ton and tin was up 0.55% at $20,050 per ton.
Precious metals were also trading higher. Silver was up 0.87% at $17.45 per troy ounce, platinum was up 0.94% at $963.05 per troy ounce and palladium was up 0.35% at $766.45 a troy ounce.
Write to Katherine Dunn at [email protected]