Copper is set for a seventh monthly gain on speculation that demand in China, the largest user, will pick up after the Lunar New Year holiday and as investors seek a hedge against accelerating consumer prices. Three-month copper on the London Metal Exchange gained as much as 1.8 percent to $9,703 a metric ton and was at $9,667 at 4:30 p.m. in Singapore, extending last week’s 0.9 percent advance. The metal, which reached a record $9,781 a ton on Jan. 19, ended last month at $9,600. A seventh monthly gain would be the best run since the eight months to August 2009. “Recent domestic stockpile movement suggests consumers have started buying to prepare for the strong demand season after the new year,” Liu Tong, an analyst at Dayou Futures Co., said from Hunan. China’s financial markets will be closed from Feb. 2 to 8 for the Lunar New Year holiday. Copper stockpiles monitored by the Shanghai Futures Exchange fell for a second week to 129,250 tons last week, the bourse said. Inventories reached a seven-month high on Jan. 13, according to Bloomberg data. April-delivery metal on the Shanghai Futures Exchange rose as much as 2.6 percent to 73,610 yuan ($11,167) a ton, the highest price since May 2007, and ended the day at 73,420 yuan. Futures on the Comex in New York climbed 0.8 percent to $4.4060 a pound, reversing an earlier loss. “Very near-term market sentiment may be affected by a stronger dollar or problems in Egypt,” said Liu, referring to the anti-government protests in that country. “The overall macroeconomic environment is improving, which will help to keep the short-to-medium-term uptrend intact.” U.S. Economy Gross domestic product in the U.S., the second-biggest consumer of copper, grew at an annual rate of 3.2 percent in the fourth quarter following a 2.6 percent increase in the previous quarter, Commerce Department figures showed last week. In 2010, the economy expanded 2.9 percent, the most in five years. The dollar was little changed against a six-currency basket including the euro today, after rising for the first time in six days on Jan. 28 on concern Egypt’s turmoil may destabilize the Middle East. President Hosni Mubarak yesterday met with military commanders as thousands of protesters defied a curfew in Cairo. “Inflationary pressures will ensure commodities remain a favored investment,” said Xu Feng, an analyst at Nanzheng Futures Co. “The market moves this week may be exaggerated by thin volumes, with many Chinese players already out.” China’s December consumer prices rose 4.6 percent, compared with November’s 5.1 percent, the fastest in more than two years. The figure for January may be as high as 5.5 percent, said Tu Jun, a strategist at Shanghai Securities Co. Aluminum in London rose 0.5 percent to $2,483 a ton, lead increased 1.2 percent to $2,467.25 a ton and nickel advanced 1.5 percent to $27,010 a ton. Zinc fell 0.2 percent to $2,350 a ton, while tin climbed 0.5 percent to $29,800 a ton, after reaching a record $30,040 a ton on Jan. 28. To contact the reporter on this story: Glenys Sim in Singapore at gsim4@bloomberg.net To contact the editor responsible for this story: Richard Dobson at rdobson4@bloomberg.net

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