Copper jumped by the most in two months and zinc hit a fresh decade-high as base metals rallied on a potent combination of a softer dollar, dwindling inventories and continued robust outlook for demand. Palladium rallied to a new record as all precious metals climbed.
Copper surged as much as 2.1 percent, the most since Nov. 13, to $7,262 a metric ton on the London Metal Exchange. All metals climbed as the Bloomberg Dollar Spot Index fell to the lowest since September, reinforcing sentiment in a market that’s being buoyed by signs of supply constraints and rebounding demand across the globe.
The improving demand outlook has helped lift the Bloomberg Commodity Index toward the highest level in 11 months. Gold climbed as the dollar weakened and investors weighed the risks of a potential U.S. government shutdown at the end of the week. Palladium hit a fresh all-time high, extending gains seen on Friday amid supply constraints.
A weaker greenback makes dollar-denominated commodities cheaper for buyers in other currencies. The yuan climbed to a two-year high, giving buyers in the world’s top metals consumer more purchasing power.
The currency shifts are boosting sentiment toward commodities that have already benefited from a stronger economic outlook, as well as speculation that raw materials including metals are in line for further gains this year.
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