Copper may rise in London on speculation the Federal Reserve will ease monetary policy to stoke U.S. economic growth, weighing on the dollar, a survey showed.
Ten of 20 analysts, investors and traders surveyed by Bloomberg, or 50 percent, said the metal will gain next week. Eight predicted lower prices and two forecast little change. Copper for delivery in three months was 0.4 percent higher for this week at $8,433 a metric ton at 3:30 p.m. yesterday on the London Metal Exchange.
“Copper prices should continue to rise next week,” John Meyer, an analyst at Fairfax IS in London, wrote in an e-mail. “Much depends on the forthcoming Federal Reserve announcement, which is expected to add further stimulus to the U.S. and to the metals sector.”
The U.S. Dollar Index, a six-currency gauge of the greenback’s strength, headed for a sixth weekly drop amid speculation that Fed policy makers may unveil more steps intended to spur growth at their next meeting on Nov. 2-3. Copper was on course for a sixth weekly climb. A weaker dollar stokes demand for commodities as an alternative investment.
The red bars on the attached chart are derived by subtracting bearish forecasts from bullish estimates, with readings below zero signaling the majority of respondents expect a decline. The green line shows the copper price. The survey data shown are as of Oct. 15.
The weekly copper survey has forecast prices accurately in 52 of the past 108 weeks, or 48 percent of the time.
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