Fund buying pushed London Metal Exchange aluminium to outperform its peers Thursday while underlying investment sentiment remained bullish towards metals.

LME three-month aluminium rallied to a two-month high of $2,689 a metric ton, up 2% on the Wednesday PM kerb after early speculative buying set the tone.

Aluminium pared some of its early gains in the afternoon after copper eased following a dollar rally to a three-week high against the euro, but trade and commodity trade advisory fund buying brought the metal back up, Triland said in a report.

Some of aluminium's 8% gains this week were ascribed to a large physical merchant "hovering up" LME aluminium warrants ahead of year-end in an attempt at a squeeze on the market, a broker said.

"There's a play for November and December and a desire to see LME aluminium back above $3,000 a metric ton," the broker said.

A more bullish stance in sentiment in the metal's market since the start of this week was also responsible for the gains, analysts said.

Fresh fund allocations started to enter the markets this week, delayed from Sep. 1 due to the U.S. Labor Day holiday, traders said.

Renewed investor interest has pushed copper back up above $8,000/ton, while lead and zinc rallied to four-month highs.

Low inventories for copper, zinc and nickel serve to uphold a bullish tone for these metals given the expected rebound in industrial production and consumer restocking after the slow summer period, analysts said.

Copper opened firm Thursday, rising to a fresh four-week high of $8,115/ton in early trade but a stronger dollar and sharply lower spot gold prices weighed prices down to $7,930 in the afternoon.

Spot gold fell to $613.65 a troy ounce, down 3.2% on the London AM fix.

LME zinc continued this week's rally to rise to a new four-month high of $3,735/ton but followed copper down in the afternoon. Bankruptcy

3 months metal (prices in dollars a ton)
Bid – Ask, Change from Wednesday PM kerb

Copper 8015.00-8020.00 Up 15.00
Lead 1318.00-1320.00 Dn 24.00
Zinc 3655.00-3660.00 Dn 65.00
Aluminium 2669.00-2670.00 Up 35.00
Nickel 28440.00-28450.00 Up 40.00
Tin 9245.00-9250.00 Up 70.00