Risk-on rally pushes copper price towards a 3% weekly gain

US consumer prices did not rise in July compared with economists’ expectation of a 0.2% gain, a report that could allow the Federal Reserve to dial down the size of its interest rate hike in September.

Data also showed on Friday that euro zone industrial production grew three times more than expected in June.

Copper for delivery in September fell 1.4% on the Comex market in New York Friday afternoon, touching $3.65 per pound ($8,030 per tonne).

[Click here for an interactive chart of copper prices]

“We’ve had a strong rebound based on short-covering and momentum buying,” independent analyst Robin Bhar said in a note.

“Recession fears are there, but they seem to have been already priced in. We don’t really have the cushion we’d usually have with inventories.”

A total of 231,000 tonnes of copper are stored in warehouses monitored by the LME, the Shanghai Futures Exchange, and the COMEX exchange in New York, down from about 375,000 tonnes a year ago.