(Oct 12): Copper extended gains as traders looked to a more hopeful outlook for interest rates and gauged the impact on supply of a fatal mine incident in Chile.

The bellwether metal climbed as much as 0.6% on Monday as a fall in oil prices fuelled some optimism that central banks could hold off on further rate hikes to rein in energy-led inflation. This came even as investors weighed geopolitical risks stemming from an escalation in hostilities in the Middle East and while awaiting the mid-week release of US inflation data. Higher borrowing costs typically reduce the appeal of non-yielding commodities.

In Chile, two workers died on Sunday after a snow avalanche struck Codelco’s giant El Teniente copper mine, where open-pit operations had already been halted due to bad weather.

That supply setback comes at a time of trade dislocations and growing global demand for the industrial metal. Chinese inventories remain low following a weeklong national holiday while a gauge of import demand reached a four-year high last week in a sign of potential restocking by buyers in the world’s biggest consumer.

Copper rose 0.5% to US$14,618 a tonne on the London Metal Exchange as of 11.54am in Singapore (same time as Malaysia), after gaining almost 2% last week. Aluminium was stable, while zinc was up 0.6%.

Uploaded by Arion Yeow