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The price of copper rose strongly on Thursday in London as investors flocked to the base metals complex on expectations of higher demand from China, as well as positive manufacturing data out of the US.
Commerzbank said in a note that durable goods orders in the US for October exceeded expectations, giving metals a noticeable boost.
The Wall Street Journal Dollar Index, which measures the greenback against a basket of 16 currencies, was up 0.12% to 91.98 on Thursday afternoon.
"The firm US dollar appears to be posing no obstacle to rising prices at present," said Commerzbank, adding that "market participants clearly expect to see strong economic growth in the US under the new President Trump, and are already handing out the laurels – somewhat prematurely in our view."
The bank said it believes "the sharp rise in metals prices is driven first and foremost by speculation and is now overheated. From a technical viewpoint, some metals have already been overbought. We therefore see considerable short-term correction potential for metals prices."
Aluminum closed 0.5% higher on Thursday at US$1,774/t, while lead was up 2.9% at US$2,237/t and nickel rose 3.1% to US$11,570/t. Zinc was 4.7% higher at US$2,693/t, while tin was up 0.6% to US$21,610/t, and molybdenum steady at US$15,250/t.