Metal prices on the London Metal Exchange have significantly increased last week, boosted by measures from the European Central Bank (ECB), infrastructure spending in China and hopes to see U.S. Federal Reserve (Fed) do more.
These indicators have put metal prices under pressure Monday and Tuesday, but this decline did not last long, because these statistics also enhanced the likelihood of support measures by the central bank of China and the U.S.
Central banks support to the economy are likely to stimulate investment in commodities. Also, such actions by the Fed tend to dilute the value of the dollar, making metals denominated in U.S. currency more attractive.
And indeed, Mario Draghi, the president of the ECB, did not disappoint by unveiling a new plan on Thursday to redeem public debt to support the weaker countries of the eurozone. Already gaining after the ECB meeting, metal prices rose sharply on Friday.
According to official media, China has given the green light to a range of investments of more than one trillion yuan ($158 billion) to develop 55 infrastructure projects, from highways to subway lines, which should increase Chinese demand for metals.
Friday, the highly anticipated monthly report on employment showed an unexpected decline in the unemployment rate in the United States in August to 8.1%, but a greater than expected decline in hiring, leading to a weaker dollar.
On the LME, the ton of copper for delivery in three months traded at $7,822 compared with 7,563 dollars a week earlier at the same time.
Other metals were also up on the week: