Industrial Metals Close Higher On Inflation Fears

CHRISTOPHER LEONARD

Industrial metal prices are ending the week sharply higher on expectations that inflation will rise.

Copper ended the week 4 percent higher Friday, while palladium ended up 2 percent and platinum rose 6 percent.

Metals are priced in dollars, so inflation makes them pricier. When the dollar loses its value, it takes more dollars to buy the same amount of copper or platinum. At the same time, a weakening dollar can make the metals an attractive investment for foreign investors who use euros or other currency because the metals become cheaper for them. That raises demand, and can raise the price of futures contracts.

Inflation fears were stoked this week when the Fed said it will likely keep interest rates low through late 2014, which could weaken the dollar versus other major currencies.

The metals are also up on expectations that U.S. economic growth will remain steady. That would keep demand for the metals high at factories, where copper and palladium are used as raw materials to make construction materials, electronic devices and other products.

April platinum gained $6.20 to end at $1,623 an ounce. March Copper fell 1.25 cents to $3.889 per pound and palladium ended down $4.30 at $690.15 an ounce.

In other metals trading, precious metals ended the week higher. Gold and silver also gain value when investors worry about inflation. Many traders see the precious metals as a way to protect their money against inflation and a weak dollar.

Gold for February delivery rose $5.50 to finish at $1,732.20 an ounce. March silver rose 4.7 cents to $33.79 an ounce.

Energy prices were mostly higher.

Benchmark oil fell 14 cents to end at $99.56 per barrel on the New York Mercantile Exchange. Heating oil rose 1.47 cents to finish at $3.0593 per gallon, gasoline futures rose 7.26 cents to $2.9234 per gallon and natural gas gained 10.2 cents to $2.756 per 1,000 cubic feet.