Copper at 10-Week High

Source:

"It's not going to be a bull market but ranges will shift higher."

Copper extended gains to touch a 10-week high, boosted by expectations of improving prospects for demand growth and a rebound in home sales data in the U.S.

Copper traded at US$7,095/ton from US$7,030/ton at Friday's close.

The metal, used in power and construction, earlier hit US$7,130/ton, its highest level since May 13.

Helping boost sentiment were sales of new US single-family homes, which rebounded strongly in June from the prior month's record low, government data showed.

"That (U.S. data) was helpful," energy and metals analyst for MF Global Edward Meir said.

"There was a near-panic situation a month ago, when everybody was talking about a double dip. . .we are (now) starting to see a little shift as activity starts to tick higher instead of lower.

"It's not going to be a bull market but the ranges will shift higher, certainly the second half of this year and going into next year."

The U.S. data came after last week's flash estimate of the eurozone purchasing managers' index for manufacturing, which showed a rise to 56.5 points in July from 55.6 in June and also a rise in the new orders index to 57.2 from 55.9.

"The euro (banks) stress tests are behind us, and markets are breathing a bit easier," Meir added.

News that only seven of 91 European banks failed stress tests designed to gauge their ability to withstand shocks in the aftermath of the 2008 global financial crisis had little lasting impact.

EU policymakers and regulators voiced relief at Friday's results, but some analysts and many media commentators derided an exercise in which all listed banks passed as lacking in credibility.

The results did, however, calm the mood in currency markets, which pushed up the euro against the dollar, making metals cheaper for holders of other currencies.

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