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Copper for delivery in September rose 1.6% on the Comex market in New York, touching $3.70 per pound ($8,140 per tonne).

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.

“The market has been short as per our estimates in which macro fears of inflation were depressing commodities prices,” said Zenon Ho, an analyst at broker Marex.

“Yesterday, US data was surprisingly good and there was a certain element of short-covering involved.”

Meanwhile, speculators in the copper market are betting a global downturn means the metal used in power and construction has further to fall, despite its recent rebound.

The latest data shows more funds with bearish positions than bullish copper positions on the London Metal Exchange and COMEX.