METALS-Copper drifts higher on increased risk appetite after Nvidia results

By Eric Onstad

LONDON, Aug 28 (Reuters) - Copper prices edged higher on Thursday, supported by a weaker dollar and increased appetite for risky assets after results from Nvidia reassured markets about the AI boom.

Benchmark three-month copper CMCU3 on the London Metal Exchange gained 0.3% to $9,789 a metric ton in official open-outcry trading after slipping 0.8% in the previous session.

LME copper, which has gained 11% this year, has been trapped in a range between $9,500 and $9,900 after failing to break above the $10,000 mark in early July.

"Metals in general are in a holding pattern right now, but the main driver today is probably stronger risk appetite following the Nvidia results last night," said Ole Hansen, head of commodity strategy at Saxo Bank in Copenhagen.

"It just highlights the importance that this whole AI craze currently has on the market and also wider investment appetite."

European stocks and Chinese shares climbed, partly because Nvidia's strong results quelled broader worries over cooling demand for artificial intelligence.

Also supporting the market was a weaker dollar .DXY as traders added to bets that the U.S. Federal Reserve will cut interest rates next month. FRX/

A softer U.S. currency makes dollar-priced commodities less expensive for buyers using other currencies.

Weighing on the market, however, were rising inventory levels, especially on the U.S. Comex exchange HG-STX-COMEX, which have nearly tripled so far this year. A large amount of copper flowed to the U.S. ahead of the announcement of 50% copper tariffs last month.

"There's a big overhang of supply sitting in the U.S., so I suppose it really depends on whether demand outside the U.S. is strong enough for that to start to shift," Hansen said.

LME copper inventories MCUSTX-TOTAL added another 1,850 tons in data released on Thursday to a three-month high of 157,950 tons.

The most-traded copper contract on the Shanghai Futures Exchange SCFcv1 eased 0.5% to 78,930 yuan ($11,034.69) a ton.

Among other metals, LME aluminium CMAL3 rose 0.3% in official activity to $2,609.50 a ton, zinc CMZN3 gained 0.2% to $2,768, lead CMPB3 was up 0.2% at $1,988 while nickel CMNI3 advanced 0.4% to $15,190 and tin CMSN3 firmed by 0.4% to $34,700.

For the top stories in metals, click TOP/MTL

($1 = 7.1529 Chinese yuan)

 For related news and prices, click on the codes in brackets: LME price overview      RING= COMEX copper futures  0#HG: All metals news         MTL   All commodities news      C 
 Foreign exchange rates FX=SPEED GUIDES LME/INDEX