Credit: Investing.com -
Investing.com - Copper prices rallied to a five-week high on Thursday, as the U.S. dollar tumbled with a June rate hike now looking less likely.
On the Comex division of the New York Mercantile Exchange, copper for July delivery touched an intraday peak of $2.834 a pound, the most since March 26, before trading at $2.833 during European morning hours, up 3.4 cents, or 1.21%.
A day earlier, copper tacked on 1.2 cents, or 0.45%, to end at $2.799. Futures were likely to find support at $2.735, the low from April 27, and resistance at $2.868, the high from March 26.
The U.S. dollar index, which measures the greenback's strength against a trade-weighted basket of six major currencies, was down 0.8% to trade at 94.57 early on Thursday, the weakest level since February 26.
The Federal Reserve kept interest rates on hold following the conclusion of its Federal Open Market Committee meeting on Wednesday, but offered little hints on the timing of its first rate hike in nearly a decade.
In its policy statement, the Fed said it will take into account labor market conditions, inflationary pressures and expectations of international financial developments when it decides on the timing of a rate increase.
The central bank removed all calendar references on a potential window for raising rates from its statement, adding to uncertainty over the timing of a Fed rate hike.
The statement came after data on Wednesday showed that the U.S. economy grew just 0.2% in the three months to March, slowing sharply from 2.2% in the final quarter of 2014. It was the slowest rate of growth in a year.
Investors were looking ahead to weekly data on initial jobless claims later in the day for further indications on the strength of the economy.
A recent run of disappointing U.S. economic data dampened optimism over the recovery, fuelling speculation the Fed could delay hiking interest rates until late 2015, instead of tightening midyear.
Copper received a further boost amid speculation policymakers in China will have to introduce further stimulus measures to jumpstart the economy amid lackluster growth.
Since November, the People's Bank of China has introduced a series of stimulus measures, including lowering interest rates twice and cutting the reserve requirement ratios of major banks twice, in order to spur economic activity and boost growth.
The Asian nation is the world's largest copper consumer, accounting for almost 40% of world consumption.
Elsewhere, gold futures for June delivery slipped $4.30, or 0.36%, to trade at $1,205.70 a troy ounce, while silver futures for July delivery slumped 5.4 cents, or 0.32% to trade at $16.64 an ounce.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
