Copper given a lift by economic data, Fed talk: LME
London Metal Exchange three-month copper surged to a near-three-week high Thursday with economic data the catalyst for fresh position-taking, market partipants said.
Copper prices traded in a narrow range for much of the morning session, only surging mid-afternoon following bullish economic data, including an upward revision in first-quarter U.S. GDP figures.
In addition, the anticipation of the Federal Reserve rate decision later Thursday, in which the Fed is expected to hike key interest rates, has also brought fresh money to the market, traders said. Broad commodities-based buying was linked to market anticipation that the officials' commentary from the FOMC meeting won't be overly hawkish, according to Triland Metals Ltd.
Copper prices touched an intraday high of $7,375/ton late afternoon, helped by short-covering and the triggering of upside stops, traders said. Prices closed at $7,300/ton at the PM kerb, up $400, or 5.8% on Wednesday's PM kerb prices.
The remainder of base metals followed copper's move higher with zinc recording the sharpest intraday gains after copper. Zinc prices firmed to $3,105/ton, up $160, or 5.4% on the previous PM kerb prices. Aluminium prices finished the kerb at $2,550/ton, up $68 on previous kerb prices and $20 shy of its intraday high.
The move higher in metals Thursday was a sharp reversal of the bearish sentiment brought about by consecutive sessions of lackluster, range-bound trading in recent days, market participants said.
"Prices were looking lower and now we find prices are getting a lift from data – not in great volumes – but enough to trigger stops," said one trader.
Despite higher prices, some traders say higher prices are unsustainable because of thin volumes.
"I still remain a little bit untrusting of these prices because there's very little volume going through," said another trader.
<< Home