KONTAN.CO.ID - LONDON. London copper prices on Friday advanced to their highest in nearly eight years, poised for a fifth straight weekly gain, on optimism over a potential U.S. stimulus package and hopes that an economic rebound could help heavily trade-dependent markets.

A bipartisan, $908 billion coronavirus aid plan gained momentum in the U.S. Congress on Thursday as conservative lawmakers expressed their support and Senate and House of Representatives leaders huddled.

"By providing support for the economy through the winter, additional stimulus would reduce risks of a double-dip recession," said ANZ in a note.

Three-month copper, often used as a gauge of global economic health, on the London Metal Exchange rose as much as 0.9% to $7,747 a tonne, its highest since March 2013, and was up 3% on a weekly basis.

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The most-traded January copper contract on the Shanghai Futures Exchange advanced 0.7% to 57,230 yuan ($8,754.78) a tonne, up 3.1% on a weekly basis.

However, with London copper already leaping 77% since March lows and Shanghai prices rallying 65% in the same period, the contracts may soon run out of steam.

"The rally in copper prices is likely to cool in the coming weeks, as speculative sentiment is extremely bullish, limiting further upside," said Fitch Solutions in a report.

"Investors are probably pricing in the broader, deeper and strong 2021 economic recovery. This increases the risk that prices could struggle to hold such gains later in 2021," the report said.

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Editor: Anna Suci Perwitasari