LONDON, Dec 12 (Reuters): Copper prices rose in London on Tuesday, supported by a weaker dollar, the prospect of tighter supply next year and hopes of more economic stimulus from top metals consumer China.
Three-month copper on the London Metal Exchange rose 0.5 per cent to $8,385 per metric ton by 1044 GMT, breaking through the resistance from its 21-day moving average at $8,379.
Making dollar-priced metals more attractive for buyers using other currencies, the dollar ticked lower with traders' focus on US inflation due at 1330 GMT which could frame Wednesday's Federal Reserve policy decision.
Elevated rates and the stronger dollar have been a drag on growth-dependent industrial metals in the past two years, said Ewa Manthey, ING's commodities strategist. ING expects the starting point for Fed rate cuts in the second quarter of 2024.
"Metals prices will benefit from looser monetary policy, which will alleviate the financial strain on manufacturers and construction companies by reducing borrowing costs," she said.
"But if US rates stay higher for longer, this would lead to a stronger US dollar and weaker investor sentiment, which in turn, would translate to lower metals prices."
Investors are also closely watching for the 2024 economic targets and stimulus plans from the Chinese leaders' annual Central Economic Work Conference, which is likely to end on Tuesday.
"A further boost for China's property sector will be crucial in supporting demand (for metals) going forward," Manthey said.
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