end higher on Monday, buoyed by positive momentum in other risk asset markets, a
drop in the price of crude oil, and strengthening technical signals that could
keep prices heading higher in the days ahead.
Volumes were active at the start of the week as the market gyrated above and
below the unchanged level in early dealings, reacting to weaker European markets
and the persistent concerns about European debt, as well as fresh worries about
higher oil prices and the impact they could have on an already fragile global
But copper's late-session move into positive territory held with the help of
a similar reversal in U.S. equities that allowed prices of the red metal regain
footing above the 200-day moving average, a key level of technical resistance
that has acted as both a line of support and an upside barrier for the better
part of February.
"That has been a significant line on the sand," Ralph Preston, futures
analyst with HeritageWestFutures.com in San Diego, California, said of the
200-day, which came in at around the $3.83 level.
"We're now pushing $3.89 … anything over $3.88 today is projecting a move
London Metal Exchange (LME) benchmark copper rose $5.50 to end at
$8,536 a tonne.
In New York, the most-active May COMEX contract settled up 1.90 cents
at $3.8890 per lb, near the upper end of its $3.8315 to $3.8965 session range.
Trading volumes tipped 82,500 lots in late New York business, nearly 20
percent above the 30-day norm, according to preliminary Thomson Reuters data.
The day began with more selling tied to the festering debt crisis in Europe
after a weekend meeting of the Group of 20 leading economies failed to reach
agreement on making more funds available to Europe and said EU leaders must
commit more money to fight the debt crisis at their summit this week.
The comments piled pressure on Germany to drop its opposition to a bigger
European bailout fund.
"We had a good run-up last week after the Greek bailout was agreed but the
markets are now shifting their focus towards the debate over the size of the
European fund," said metals analyst Edward Meir at INTL FCStone.
"It is also important to keep an eye on Brent oil prices; as it has
got the potential to slam all other commodities. If it moves $10 higher it
starts to become quite serious because you get inflationary pressures and rising
input costs for metals."
Rising oil prices, which touched 10-month highs last week on worries over
disruption to Middle East supplies, stirred the spectre of global recession,
with Europe having the most to fear as its brittle economy falters.
But copper pushed higher with bullish investors flagging support from a
tighter supply outlook, highlighted by another stoppage at the Grasberg mine in
Freeport McMoRan Copper & Gold Inc.'s has told workers at the mine
not to work due to safety concerns linked to labour unrest, a union official
said on Sunday.
"The supply side is very strained; we are not getting more material out but
the focus currently remains on demand," Meir said.