Copper prices rose on Friday ahead of U.S. inflation data that could support future interest rate cuts while some traders bought futures after they failed to break below key support.
Three-month copper CMCU3 on the London Metal Exchange gained 1.1% to $9,622 a metric ton in official open-outcry trading. The contract has fallen 4% in June and is set for a sixth straight weekly loss.
"The push and pull of the base metals market right now is almost hypersensitive to the rate cut outlook," said WisdomTree commodity strategist Nitesh Shah.
"The ECB and Switzerland have already cut and the question is when will there be enough cooling of inflation for the Fed to make its move. The data we've been getting seem to be supportive, so rate cuts could be relatively soon."
The Federal Reserve's preferred inflation measure, the personal consumption expenditures (PCE) index, is due at 1230 GMT. If annual growth slowed to 2.6% in May, as economists expect, that could open the way to interest rate cuts this year.
There was also buying of copper after it held above a key support level of $9,480 on Thursday, a trader said. A break below that could open up more losses to about $9,100.
After advancing to a record high of $11,104.50 on May 20, copper prices have fallen 14%, partly on sluggish economic data from China and uncertainty over U.S. interest rates.
"I think we will see copper average around $9,500 per ton for the year, but prices will likely go above $10,500 by year-end, when I suspect we will have the first U.S. rate cut," said StoneX analyst Natalie Scott-Gray.
LME zinc CMZN3 added 1.6% in official activity to $2,975 a ton, having pared gains after LME data showed a 9% rebound in inventories to the highest level in nearly three months.
In other metals, LME aluminium CMAL3 gained 1.3% to $2,525.50 a ton, nickel CMNI3 advanced 1% to $17,265, lead CMPB3 was up 1.3% at $2,209 and tin CMSN3 jumped 3% to $33,175.
Source: Reuters (Reporting by Eric Onstad, Additional reporting by Ashitha Shivaprasad in Bengaluru, Editing by Emelia Sithole-Matarise and David Goodman)