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By Eric Onstad
LONDON, Jan 29 (Reuters) - Copper prices spiked to a record high of more than $14,000 a metric ton on Thursday, as speculators extended their buying spree, encouraged by expectations of strong demand and supported by a weak dollar and geopolitical concerns.
In volatile swings, copper spiked in the biggest one-day jump in more than 15 years and then gave up much of the gains, while other metals surged before slipping into the red.
Benchmark three-month copper on the London Metal Exchange jumped 11% to an all-time high of $14,527.50 a metric ton, before paring gains to $13,612.50 by 1700 GMT, a rise of 4%.
The bulls, mostly at speculative funds, ignored warnings by some analysts that high prices would chill physical demand by industrial consumers and was not being supported by current supply/demand fundamentals, creating a dilemma for investors.
"Copper posted its biggest one-day gain in years... driven by intense speculative trading by bulls in China," Neil Welsh at Britannia Global Markets said in a note.
"Investors are piling into base metals on expectations for stronger U.S. growth and more global spending on data centres, robotics and power infrastructure."
Copper, used in power and construction, is a key metal needed for the energy transition, but global exchange-monitored inventories are at high levels, especially in the U.S.
The most-active copper contract on the Shanghai Futures Exchange closed daytime trading 6.7% higher at 109,110 yuan ($15,708.77) a ton, after setting a record of 110,970 yuan.
The gains came despite weak spot physical demand in the biggest consumer market China. The Yangshan copper premium, a gauge of Chinese demand for imported copper, declined to $20 a ton on Wednesday, the lowest since July 2024 and down from $55 in December.
Copper is also rising due to a spillover of interest for hard assets, which have sent gold and silver to records, partly due to geopolitical tensions, traders said.
Also supporting metals was a weaker dollar index, which was close to multi-year lows, making commodities priced in the U.S. currency cheaper for buyers using other currencies. [FRX/]
Other LME metals were also hit by erratic trading, with LME tin surging to another record high of $59,040 a ton, despite weak fundamentals, and then sinking 2.5% to $54,540.
LME aluminium climbed 3% to $3,356 a ton, the highest since April 2022, before retreating 1.1% to $3,222.
Zinc gained 1.4% to $3,412 a ton after hitting the strongest since August 2022. Lead dipped 0.3% to $2,012 and nickel was up 0.5% at $18,355, well down from an intraday high of $19,150.
($1 = 6.9458 Chinese yuan renminbi)
