Friday 25 September 2009

BASE METALS: Comex Copper Rises On Short-Covering Correction

Fri, Sep 25 2009, 17:35 GMT

BASE METALS: Comex Copper Rises On Short-Covering Correction

By Allen Sykora

Copper futures bounced Friday on short covering as traders who previously sold were buying back to offset their positions ahead of the weekend.

Most-active December copper rose 3.10 cents to settle at $2.7405 per pound on the Comex division of the New York Mercantile Exchange.

"It's just re bounding from its two-day sell-off," said one trader. "Yesterday, it was down sharply, and we're certainly down from where we were just Tuesday."

As recently as three days ago, the metal was as high as $2.8920 before hitting a five-week low of $2.6730 early Friday.

"This is a little short covering," the trader said. The market held just above the Aug. 19 low of $2.66.

Ira Epstein, director of the Ira Epstein division of The Linn Group, described copper's uptick as a correction in a market disappointed by a U.S. existing-home sales report Thursday.

"It took all the pizzazz out of it, but it got oversold because it has fallen so far from its most recent high," he said. "That [existing-home sales] took it back three or four steps at one time, and today's rally is probably no more than a reaction to being the weakest of the metals, falling the most and now bouncing a bit. It's just a correction-type bounce."

Epstein listed support for December lies around $2.71, although noting it dipped as low as $2.6730. He lists resistance at $2.84.

Inventories of copper stored in London Metal Exchange warehouses fell 175 metric tons Friday, leaving them at 340,700. The most recent Comex inventory data, released late Thursday afternoon, were up 46 short tons at 53,750 short tons.

Once-a-week data released on Fridays by the Shanghai Futures Exchange showed a weekly decline of 5,559 metric tons to 98,689.

Copper settlements (ranges include electronic and pit trading):
December $2.7405; up 3.10c; Range $2.6730-$2.7435
March $2.7540; up 3.05c; Range $2.7090-$2.7550

-By Allen Sykora, Dow Jones Newswires; 541-318-8765;

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(END) Dow Jones Newswires

September 25, 2009 13:35 ET (17:35 GMT)

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