Copper prices in London surged to their highest in over three weeks on Friday, marking the first weekly gain in seven weeks. This rise is driven by the positive outlook on U.S. interest rates, which has bolstered sentiment towards growth-dependent metals.By 0938 GMT, three-month copper on the London Metal Exchange (LME) had risen 0.6% to $9,945 per metric ton, after hitting $9,967.5, its highest level since June 12. The contract has increased by 3.5% this week.
The dollar weakened on Friday amid growing hopes that the U.S. Federal Reserve will cut interest rates, making dollar-priced metals more attractive to buyers using other currencies. Market participants are keenly awaiting the U.S. non-farm payrolls data later in the day for further economic insights.
“We believe the Fed’s interest rate path will continue to drive copper’s short-term price outlook,” said Ewa Manthey, a commodities analyst at ING. “But if U.S. rates stay higher for longer, this would lead to a stronger U.S. dollar and weaker investor sentiment, which in turn would translate to lower copper prices.”
Copper, essential in power and construction sectors, is down 10% since speculative buying pushed prices to a record high of $11,104.5 on May 20. This decline has revived some demand in top consumer China, narrowing the discount to import copper into the country to $2 a ton from $20 in May.
However, rising inventories are limiting the potential for further copper gains. Inventories in warehouses monitored by the Shanghai Futures Exchange rose by 0.7% this week, while LME data shows that stocks in LME-registered warehouses have reached their highest levels since October.
Technically, copper faces resistance at its 50-day moving average of $9,993.In other metals, zinc increased by 0.7% to $3,008 a ton after China’s MMG halted operations at its Dugald River zinc mine in Australia for about two months of repair work.
LME aluminium rose by 0.7% to $2,539 a ton, lead edged up 0.4% to $2,229.50, tin jumped 1.2% to $33,505, and nickel advanced by 1.1% to $17,395. 
