Dec. 28 (Bloomberg) -- Copper gained to a record in New York for a second day as investors sought alternatives to depreciating currencies and on expectation demand will outpace supply as consumption improves.
Metal for March-delivery on Comex climbed as much as 0.6 percent to $4.3075 a pound, surpassing the previous peak for a most-active contract of $4.2985 reached yesterday. It traded at $4.298 a pound by 11:24 a.m. London time, up 28 percent this year and poised for a second annual increase.
"It’s weaker currencies, inflationary concerns and the outlook for a shortfall next year that’s been driving prices,” Wen Jinghai, an analyst at Bohai Futures Co., said from Dalian.
The dollar dropped for the fourth day against a six- currency basket including the euro and yen on speculation a report today will show U.S. home prices fell, backing the case for the Federal Reserve to keep borrowing costs low.
"While the fundamentals are supportive, we’ve heard these reasons many times before so I really wouldn’t read too much into record prices at the moment because the market is moving on very low volumes,” said Wen.
Stockpiles of copper in Shanghai Futures Exchange warehouses fell 7,410 tons last week to 120,426 tons, the largest tonnage decrease since the week ending Sept. 9, bolstering the demand outlook in China, the world’s largest user. The International Copper Study Group is expecting a 435,000-ton deficit in the refined metal next year.