Copper prices jumped 6.4 percent, rising for a second day, as a weaker dollar and higher energy prices renewed demand for commodities as a hedge against inflation.
The dollar fell the most against the euro since the 15- nation currency's debut in 1999 and crude oil rebounded from a one-week low, gaining as much as 12.3 percent. Copper rallied 8.4 percent last week, the biggest advance since May 2006. The Standard & Poor's GSCI Index of 24 commodities was up as much as 9.3 percent today, the biggest gain since at least 1970.
''The dollar is selling off today, which is really pumping up all the commodities, and copper is along for that ride,'' said Michael Gross, an analyst at OptionSellers.com in Tampa, Florida.
Copper futures for December delivery rose 11.8 cents to $1.958 a pound at on the Comex division of the New York Mercantile Exchange, recovering part of the decline last week that sent the metal to a three-year low of $1.6265 on Oct. 27. The price gained 0.6 percent yesterday.
Copper is ''pushing higher on a weaker dollar and steadier oil prices,'' Edward Meir, an analyst at MF Global Ltd. in Darien, Connecticut, said today in a report.
Dollar Falls
The dollar fell 2.6 percent to $1.2969 per euro at 2:11 p.m. in New York, from $1.2643 yesterday. The U.S. currency lost 0.8 percent against the euro last week.
''The next major event awaiting the markets'' is the result of today's U.S. presidential election, Meir said.
Speculation that Democratic candidate Barack Obama, who leads national polls, will win against Republican John McCain helped send the dollar lower and boosted equity and commodity markets, Gross of OptionSellers said.
''With Obama, there's this idea that there will be more domestic spending, which may push down the value of the dollar and be good for commodity prices,'' Gross said.
Copper still has dropped 54 percent since touching a record $4.2605 a pound in May as a slumping global economy reduced demand for the metal used in pipes and wires.
U.S. factory orders fell in September, the Commerce Department said today. The U.S. economy contracted in the third quarter by the most since the 2001 recession. Growth has also slowed in Europe and Asia.
Credit Suisse Group AG yesterday cut its forecast for 2009 global copper demand, citing a slowdown in China's economic expansion. Consumption will fall 0.2 percent next year, analyst Jeremy Gray said. That compares with an earlier projection of a 1 percent gain. China is the world's biggest metals buyer, followed by the U.S.
''Even with today's gains, I can't see going to major rally phase right now, given the current demand situation,'' Gross said.
On the London Metal Exchange, copper for delivery in three months added $211, or 5.2 percent, to $4,301 a metric ton ($1.95 a pound).
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