LONDON – Copper prices surged on Wednesday after investors bet that the U.S. central banks would not raise interest rates too fast, allowing for economic growth and increased metals demand.

The three-month copper price on the London Metal Exchange was up 1.6% to $9.955 per tonne at 1715 GMT. This is in addition to the 0.8% increase recorded in the previous session. On Wednesday, the U.S. Federal Reserve will signal its intention to increase interest rates in March. It focuses on fighting inflation.

“The mood in markets has changed overnight,” stated Daniel Briesemann, analyst at Commerzbank in Frankfurt.

“If the Fed acts in a moderate way, the economy will continue to recover from its COVID low of 2020. This supports metals demand.”

This positive mood lifted equity markets and oil prices reached $90 per barrel for the first-time in seven years due to tensions between Russia and Ukraine.

The Shanghai Futures Exchange’s most traded copper contract ended up 1.3% at 70.730 Yuan ($11,000. A tonne).

However, signs of China’s near-term physical demand were not as encouraging. The Yangshan copper premium last stood at $62 per tonne. This is down from $88 a few months ago.

LME Aluminium rose 0.2% to $3.099 per tonne on Tuesday, after rising by 2.1% on Tuesday due to concerns that Russia-Ukraine tensions would impact supply.

Al Munro, broker Marex, stated in a note that the market expected sanctions to be imposed against Russia but there wasn’t as much scope to gain as in 2018, when prices soared to seven-year highs. “In contrast to 2018’s impact… the market has already reached elevated levels.”

LME zinc rose 1.2% to $3.615 per tonne, nickel rose 2% to $22,785, nickel rose 2% to $22,785, and tin increased 2.7% to $42,500, while lead was unchanged at $2,335.