Copper prices near six-week high as one strategist says the 'worst of the correction is over'

Copper prices on Tuesday rose to an almost six-week high, supported by fresh investor demand and market optimism over the potential for imminent U.S. interest rate cuts.

Copper for September delivery briefly touched $4.3065 per pound in New York on Tuesday, notching its highest level since July 18, when copper traded as high as $4.4280. The contract was last seen trading 0.4% higher at $4.2365.

Three-month copper on the London Metal Exchange, meanwhile, traded 1.3% higher at around $9,406 per metric ton.

Prices of the red metal have been climbing steadily in recent weeks, paring losses after falling to a four-month low in early August.

Ole Hansen, head of commodity strategy at Saxo Bank, said copper's recent rally had been bolstered in part by renewed demand from hedge funds which had previously cut their exposure to the base metal "during the recent and deep 24% correction."

"We believe the worst of the correction is over, but before copper can mount a stronger recovery, demand fundamentals need to improve, potentially supported by restocking through lower funding costs once the [Federal Open Market Committee] starts its long-awaited rate-cutting cycle," Hansen said in a research note published Friday.

"Until then, traders will continue to look out for signs of improvement, not least through the reduction of elevated stock levels at warehouses monitored by the three major futures exchanges," he added.

Late last week, Federal Reserve Chairman Jerome Powell boosted already high expectations for a U.S. interest rate cut at the central bank's Sept. 18 meeting.

Powell on Friday said that "the time has come for policy to adjust," although declined to provide exact indications on the timing or extent of the cut.

Copper prices are seen