It was reported that world spot copper traded at $3.15/lb this week, the highest price this month, as a declining dollar has fueled demand for metals as alternative assets. Copper futures for May delivery averaged $3.24/lb on Tuesday on both the London Metal Exchange (LME) and the New York Mercantile Exchange’s Comex unit.

The spot global copper price has fallen from $3.35 in January to $3.02 so far this month on speculation that budget gaps in Portugal, Italy, Greece and Spain could derail the global economic recovery. However, Bloomberg now quotes Michael Widmer, a strategist at Bank of America/Merrill Lynch Research in London, as saying that copper and other nonferrous metals futures have climbed in price as traders and investors are “less pessimistic” about Greece’s budget deficit especially and have returned to higher-risk assets.

“Declines in metals this year are not really driven by metals fundamentals, but a broader macroeconomic environment,” Widmer tells Bloomberg in an interview. Copper in LME warehouses is around 549,900 metric tons this week but Widmer says there has been a steady rise in bookings this month to remove 16,000 metric tons of the metal from warehouses registered with the LME-which signals growing demand from manufacturers.

Catherine Virga, senior base metals analyst with CPM Group in New York, tells Reuters that “we are seeing an uptick in physical demand across the base metals complex due to the lower prices.”

Then there’s China, the world’s largest copper consumer. Copper demand is expected to grow by more than 11% in the first quarter.  “The demand picture out of China is still robust,” analyst Dan Smith at Standard Chartered Bank in London writes to clients. “Once China comes back from the New Year holidays things will pick up and this price rebound is an anticipation of that.” Chinese markets are due to reopen next week after this week’s New Year break.