Reuters reported that Copper prices rallied with benchmark London and Chinese contracts at the highest in up to five months after the US Federal Reserve launched a new round of aggressive stimulus that could boost demand for industrial metals.

Optimism coursed through financial markets lifting Asian shares and driving the euro to 4 month high against the dollar after the Fed said it would pump USD 40 billion into the world's largest economy per month until it saw a sustained upturn in the weak jobs market.

Three month copper on the London Metal Exchange hit a fresh four month peak, rising 3.5% to its session high of USD 8,355 per tonne the highest since May 2 before giving up some gains to trade at USD 8,290.50 by 0145 GMT.

London copper is on track for a weekly increase of more than 4% which would bring its gains over 2 weeks to almost 9% its biggest two-week rise since November last year. The January copper contract on the Shanghai Futures Exchange shot up about 4% to a session high of CNY 60,440 per tonne its loftiest since April.

Base metals rose across the board, with Shanghai zinc jumping 4.4% to CNY 15,980 also its highest since March.

LME tin rallied more than 4% revisiting 4 month peak of USD 21,200 it had touched on Wednesday. While traders predicted a spike in base metal prices, they doubted if the rally could be sustained for long.

Mr Andy Du Orient Futures derivatives director said that "It's hard to say how long this rally will last given the uncertainties over how long the Fed will keep this stimulus going and how effective it will be."

Source - Reuters

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