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Industrial Metals Rally as Fed Announces More Stimulus

December 13, 2012 at 1:19 by Vladimir Vyun

Industrial metals rallied on the London Metal Exchange after the Federal Reserve implemented additional stimulating measures. The US central bank expanded its asset purchase program by $45 billion per month to $85 billion. The Fed said that the monetary policy will remain extremely accommodative as long as unemployment stays above the 6.5 percent level.

Metals felt some pressure from negative macroeconomic data, including the increasing US trade deficit. Reports from Europe were also poor as eurozone industrial production contracted 1.4 percent in October and the Consumer Price Indices of Germany and France were in a negative territory in November. Yet the reports did not discourage the metals’ rally.

Contract for delivery of copper in three months rose $30 (0.37 percent) to close at $8,130 per metric ton on LME. Futures for aluminum advanced as much as $24 (1.13 percent) to $2,140 per ton. Zinc added $15 (0.72 percent) to $2,095 per ton.

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