Copper prices rise on inventory decline

The price of gold held steady for the most part on Tuesday, trading at $644.40 per troy ounce as investors waited for the US Federal Reserve to make its latest decision on interest rates. The announcement of the decision is due on Wednesday. Lower gold prices were credited with a resurgence in Chinese gold purchases in the fourth quarter of 2006, while the World Gold Council said that consumption for the full year was at around 240 tonnes in China in 2006, unchanged from the year before.

Base metals prices were mostly lower on the session. The exception was copper, which added 1.5 percent to $5,670 per tonne after London Metal Exchange warehouse stockpiles fell by 3,275 tonnes. Phelps Dodge reported that it believes global consumption of copper will be 3.5 percent higher in 2007, while it is likely to rise by 1 percent in the United States. Chinese consumption is expected to go up by 7 percent, against a rise of 5 percent in 2006.

The price of aluminium dropped by 0.5 percent to $3,696.5 per tonne as LME inventories grew by 3,925 tonnes. Zinc fell 3.2 percent to $3,390 per tonne as Australian producer Zinifex said that supplies were likely to remain tight in 2007. The price of nickel was 4.4 percent lower to $35,700 per tonne on hopes that a threatened strike at Sudbury mine in Canada could be averted before the current contract expires.