The industrial metals pack managed to conclude the week on a positive note after being under constant pressure in recent months, with LME Zinc being the leading gainer with a gain of about 11%.
Following the Federal Reserve's 75 basis point increase in interest rates to combat the rising inflation, this week saw a recovery in metal prices from their lows, with copper rising to a three-week high on the back of a weaker dollar, making dollar-priced metals more affordable to customers using other currencies.
The metal used in electricity and construction did bounce back from 20-month lows. However, it is still down nearly 30% from a record high in March, and the aggressive interest rate hikes in several countries can cause an economic slowdown.
Another notable development was the reports that China may offer 1 trillion yuan in loans for real estate projects that have stalled since the stimulus will increase market confidence and raise expectations for more demand from the top consumer after COVID-19 lockdowns hampered industry activity.
Outlook: We expect copper to trade higher towards 666 levels, a break of which could prompt the price to move higher to 677 levels.