Copper Futures Top $4, Touching 28-Month-High as Commodity Demand

* Tin hit US$ 27,350/tonne

Copper topped $4 a pound, extending a rally to a 28-month-high, as speculation mounted that the dollar will weaken and as commodity prices surged. 

The greenback has slumped 8.5 percent against a six- currency basket since July 1 on concern that Federal Reserve spending will spur inflation. The Fed said last week it will purchase an additional $600 billion of Treasuries through June to bolster the U.S. economy. 

The Thompson Reuters/CRB Index of 19 raw materials rose for a ninth straight day, heading for the longest uninterrupted advance since March 2005. 

“Lingering misgivings” about the Fed’s move are “fueling the general aversion away from paper currencies and into hard assets,” Edward Meir, an analyst at MF Global Holdings Ltd. in Darien, Connecticut, said today in a report. 

Copper futures for delivery in December added 8.65 cents, or 2.2 percent, to close at $4.043 a pound at 1:35 p.m. on the Comex in New York. Earlier, the price reached $4.0475, the highest level since July 2, 2008. 

The metal reached a record $4.2605 in May 2008. 

“Copper fundamentals are exceptionally strong,” said Wayne Atwell, a managing director at Casimir Capital in New York. 

Prices will reach new highs within three months, driven by strong demand from China, the world’s largest metals user, and a dearth of new supplies, Atwell sad in a report yesterday. The price will climb to $5 next year and $6 in 2012, he said. 

The dollar fell as much as 0.4 percent before erasing earlier losses. 

On the London Metal Exchange, copper for delivery in three months climbed $198, or 2.3 percent, to $8,858 a metric ton ($4.02 a pound). 

Tin for three-month delivery rose $750, or 2.8 percent, to $27,350 a ton on the LME, after earlier touching an all-time high of $27,500. Lead advanced to a 10-month high, and zinc gained 4.1 percent. Nickel and aluminum also rallied.Source: Bloomberg