Copper Heads for Longest Rally in Five Months; Dollar Drops


"With the dollar crashing, it's adding a boost to all the commodities."

Copper prices rose, heading for the longest rally five months, as the dollar's decline spurred demand for commodities as an alternative investment.

The greenback fell as much as 1.3% against a basket of six currencies. The gauge dropped 0.8 % last week. Copper also rose on renewed optimism the global economy will continue to expand. The Reuters/Jefferies CRB Index of 19 raw materials rose to a four-week high.

"With the dollar crashing, it's adding a boost to all the commodities," said Michael K. Smith, the president of T&K Futures & Options in Port St. Lucie, Florida. "The global economic momentum is still positive, and demand will be strong."

Copper futures for July delivery rose 7.5 cents, or 2.6%, to $2.979 a pound at 10:15 a.m. on the Comex in New York, poised for the fifth straight gain, the longest rally since early January. The metal climbed 3% last week.

A report showed European industrial production increased more than economists forecast in April, easing concern a debt crisis in the region will derail the recovery. The MSCI World Index of shares gained as much as 1.3%.

"Friendly equity markets, a weaker dollar, some optimism and bargain-hunting" lifted metals," said Eugen Weinberg, an analyst at Commerzbank AG in Frankfurt.

Before today, copper dropped 13% this year as Greece, Spain and Portugal struggled with budget gaps and China moved to cool its property market.

Copper for delivery in three months advanced 2.2% to $6,620.75 a metric ton ($3 a pound) on the London Metal Exchange. Aluminum, tin, nickel, lead and zinc prices also gained.

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