Lead drove base metals high on the benchmark London Metal Exchange, following American lawmakers agreeing on a long-awaited deal to avoid a fiscal crisis.
The US leaders approved a plan to prevent huge tax increases and delay spending cuts that together might have pushed the world's largest economy off the 'fiscal cliff' and into a likely recession.
While the lead price hit a 15-month high to settle at $2,385 a tonne, copper followed and achieved a two-week high of $8,085 a tonne today.
Other base metals, including aluminium, zinc and tin, moved the same way.
Along with base metals, precious metals, including gold and silver, moved up both in the global as well as domestic markets.
In London, gold was up to $1,688.25 an oz and silver went up to $31.19 an oz.
Despite concerns of the finance ministry planning to raise the import duty on gold by another two per cent after raising it four-fold last year, demand for the yellow metal is unlikely to be affected in India.
"In addition to the clearance of the US fiscal cliff, base metals got support from the hope of robust demand from the world's largest consumer, China, tracking expansion in Chinese manufacturing activity.
Prices may also seek support from firmness in Asian equities and weakness in the dollar," said Priyanka Jhaveri, analyst with Kotak Commodities Services.
The gains might, however, be capped on sluggish demand in the physical market and rising stocks at exchange warehouses, along with economic releases and its impact on the global equity and currency market.
For copper, focus will be on the Euro zone, and the US and UK manufacturing PMI.
Appreciation in the Indian currency against the greenback would partly cap the reflection of the price rise.
The fundamentals for aluminium,
lead and zinc remain different from those of copper.
The biggest obstacle for the price growth in these metals is excessive supply and massive cancelled warrants.
Both factors, however, indicate waning demand for these metals, due to an overall weakening global economic sentiment and shaky impact of the US fiscal cliff.
While the cancelled warrant (cancelling orders after booking) for aluminium, lead and zinc works out to 42.8 per cent, 57.32 per cent and 50.67 per cent in the recent past, a supply glut continues.
Aluminium stocks in LME-registered warehouses continued to remain at a near-record level of 52,41,525 tonnes.
Meanwhile, the International Lead and Zinc Study Group estimated the global lead and zinc markets remained in a surplus of 67,000 tonnes and 157,000 tonnes until October 31.
According to Kunal Soni, an analyst with Emkay Commotrade Ltd, a weaker dollar has always showed positivity in the base metals sector, especially copper.
The fiscal cliff worries in the way of investors has been partially averted and sentiment has improved. Chinese Manufacturing PMI, which came recently at 50.6, can also support copper prices, he added.
The euro rose to $1.3281 as the dollar fell 0.5 per cent against a basket of major currencies.
The Japanese yen also continued its slide, hitting its lowest level since July 2010, as investors bet that the Bank of Japan would have to take ever-more aggressive easing steps to support the economy and satisfy the new government.
Attributing the price spurt to resolution of the US fiscal cliff issue and weakness in the dollar, Naveen Mathur, associate director of Angel Broking, said, "Overall, the commodity basket is expected to trade with an upward bias, following positive fundamentals that emerged in the US development."
Spot silver was up by 1.8 per cent today in early trade on the Multi Commodity Exchange.
Lead drove base metals high on the benchmark London Metal Exchange, following American lawmakers agreeing on a long-awaited deal to avoid a fiscal crisis.