PHOTO
LONDON - Copper prices eased on Friday after two days of strong gains due to worries that expectations for a halt to interest rate hikes may be premature and the lack of more stimulus in top metals consumer China.
Benchmark three-month copper on the London Metal Exchange slipped 0.3% to $8,665.50 a metric ton in official open-outcry trading after touching a fresh three-weak high of $8,719.50.
Prices shot up during the previous two sessions after weaker than expected U.S. inflation data on Wednesday, sending global financial markets higher on hopes that the Federal Reserve would soon stop pushing up interest rates.
"The bounce that we've had on the back of the CPI numbers is maybe a bit premature. I think we need to get a string of softer CPI numbers before we see a decisive move by the Fed," said Nitesh Shah, commodity strategist at WisdomTree.
Investors have been counting on new stimulus measures in China after lacklustre factory data and weak demand have been weighing on the market.
"There's so much expectation built around China rolling out some more meaningful stimulus at some point, but the longer markets wait, the more chance of China not delivering," Shah added.
The dollar had hovered at 15-month lows after a steep dive in the previous session, as markets wagered the Federal Reserve was close to the end of its rate hike cycle due to easing inflation.
But the dollar index was slightly firmer on Friday, making commodities priced in the U.S. currency more expensive for buyers using other currencies.
In other metals, LME aluminium shed 0.4% in official activity to $2,268 per ton, but was on track to gain 6.2% on the week, its strongest since Jan. 13.
LME nickel climbed 1% to $21,500 while tin eased 0.3% to $28,725, zinc dropped 1.7% to $2,436 and lead dipped 0.1% to $2,124.
($1 = 7.1330 yuan)
(Reporting by Eric Onstad; editing by David Evans and Jason Neely)