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copper hit 3.80, page-2

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    sorry made that 3.85

    Copper Jumps to Highest Since 2006 on Inflation-Hedge Demand

    By Millie Munshi

    Feb. 21 (Bloomberg) -- Copper jumped to the highest since May 2006 on increased demand for raw materials as a hedge against inflation.

    Consumer prices in the U.S. rose more than forecast in January, a government report showed yesterday. The dollar fell today against a basket of six major currencies. Commodity prices surged as accelerating inflation increased speculation that the value of metals including copper, gold and silver will climb.

    ``People are viewing commodities, including copper, as a hedge against inflation,'' said John Gross, director of metals management at Scott Brass Inc. and publisher of the Copper Journal in Cranston, Rhode Island. ``Commodities across the board are moving higher in unison.''

    Copper futures for May delivery gained 12.4 cents, or 3.3 percent, to $3.843 a pound at 11:55 a.m. on the Comex division of the New York Mercantile Exchange. Earlier, the price touched $3.8545, the highest since May 30, 2006.

    Gold futures reached a record $958.40 an ounce today in New York. Crude oil futures slid to $99.65 a barrel after rising to a record $101.32 yesterday. Silver futures gained 1.6 percent, to $18.045 an ounce.

    Copper also jumped as inventories tallied by the London Metal Exchange declined 1.6 percent to 135,375 metric tons, the lowest since Oct. 10. Stockpiles tracked by the exchange have tumbled 31 percent this year, helping send the price up 25 percent.

    ``Inventories have been declining consistently over the last couple weeks and have now reached a fairly low level,'' Gross said.

    Inflation Pressure

    U.S. consumer prices advanced 0.4 percent last month, the Labor Department said yesterday. Economists had forecast a gain of 0.3 percent, according to the median of 74 projections in a Bloomberg News survey.

    The dollar fell as much as 0.6 percent today against the basket of currencies including the euro and yen, touching its lowest value in two weeks.

    On the LME, copper for delivery in three months gained $260, or 3.2 percent, to $8,410 a ton. The metal rose to a record $8,800 a ton in May 2006.

    The UBS Bloomberg Constant Maturity Commodity Index gained 1.2 percent to 1,463.9, the highest ever. The gauge of 26 commodities has climbed 15 percent this year.

    To contact the reporter on this story: Millie Munshi in New York at [email protected]
    Last Updated: February 21, 2008 12:01 EST
 
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