The base metals were all glowing green on Wednesday. Copper rose from the pre-dawn hours to just after noon in New York, then eased for the rest of the day, finishing at $2.2554/lb., up 7 cents.

Nickel followed copper’s path exactly, ending at $6.9324/lb., up 28¾ cents. Zinc was roughly similar, closing at $0.7108/lb., up 2¾ cents. Aluminum was strongly higher, adding nearly 2 cents, to $0.7312/lb., while lead had a very good day, tacking on 2½ cents, to $0.7606/lb.

Copper led the industrial metals sharply higher as, according to Bloomberg, “the Organization for Economic Cooperation and Development raised its growth forecast and U.S. durable-goods orders unexpectedly increased, boosting the demand outlook for the metal.

“The combined economy of the 30 OECD members will grow 0.7 percent in 2010, the group said today, raising its estimate for the first time in two years …

“ ‘The global economy has a good shot at a rebound,’ said Michael K. Smith, the president of T&K Futures & Options in Port St. Lucie, Florida. ‘The big picture is looking good for copper’.”

Smith added that he expects demand from emerging economies including China and India to remain strong. “The sell-off was a temporary situation for copper and it was just a normal correction in a bull market,” he said.

Though the optimists were winning the daily war with the naysayers, the base metals’ upward trajectory abruptly came to an end with the release of the Fed’s cautionary statement.

However, if the Fed fails to convince investors it can control inflation “without snuffing out signs of a recovery by raising interest rates,” there may be “further money flow into commodities as an inflation hedge,” wrote Leon Westgate, of Standard Bank Group Ltd. in London.

On the stockpile front, copper inventories monitored by the LME declined another 1,225 metric tons yesterday, to 275,050 tons.

Source: Base Metals Rally Strongly