METALS-London copper hits 3-week high on hopes of EU stimulus

Tue Aug 26, 2014 7:47am GMT
 

* Spot business remains slow on tighter credit -trader

* Alcoa to shut Sardinian ops, cut aluminium output by 150,000 T

* Coming up: U.S. durable goods orders July at 1230 GMT (Adds detail; updates prices)

By Melanie Burton

SYDNEY, Aug 26 (Reuters) - London copper climbed to a three-week high as the market reopened after a holiday weekend on Tuesday, with signs of weakening in Europe's economy fanning hopes for fresh stimulus.

In stronger language than he has used in the past, European Central Bank President Mario Draghi said on Friday that the ECB was prepared to respond with all its "available" tools should inflation drop further.

"The important thing is Draghi's about face. He said 'we're going to use fiscal stimulus to get this going' - and the markets like it," said Jonathan Barratt, chief investment officer at Ayers Alliance in Sydney.

"What we want to see is this rhetoric followed up with concrete action, and that would provide the confidence to conclude that the technical base we feel is in place for copper is of substance."

Three-month copper on the London Metal Exchange reached its highest since Aug. 5 at $7,108.75 a tonne before giving up the gains to trade flat at $7,070 a tonne by 0730 GMT. Prices notched up their biggest weekly gain last week in 11 months.   Continued...

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