Copper at Week's Highest Close
Source: Reuters, Selam Gebrekidan and Maytaal Angel (8/27/10)
"U.S. jobs data eased concerns about the economy."
Benchmark copper CMCU3 on the London Metal Exchange ended at $7,304.5 a ton from a close of $7,101 on Wednesday, hitting a one-month low of $7,028.25.
Copper for September delivery HGU0 rose 9.35 cents, or 2.91%, to close at $3.3045 per pound on the COMEX metals division of the New York Mercantile Exchange, its highest finish since Aug. 20.
Copper hit $3.32 per pound in early trading, its highest also since Aug. 20, supported by data showing initial U.S. claims for unemployment benefit fell last week.
"The decline in claims numbers eased fears of a double-dip recession. The economy is not out of the woods yet, but today's numbers indicated that the market was oversold," said Peter Buchanan, commodities analyst and senior economist at CIBC in Toronto.
Prices had started to climb at the market close on Wednesday, leading some traders to believe the rally was supported more by increasing demand.
"The market sold off to a point of value where it got support, around $3.20 per pound. And we saw buyers come into the market at the lows of the week," said Frank Lesh, broker and futures analyst with Future Path Trading in Chicago.
"What we're really seeing is a drawdown in LME stocks, which shows strong demand and is lifting prices," Lesh said.
LME copper stocks fell 1,175 tons to 401,250 on Thursday. Stocks are down more than 150,000 tons since a mid-February peak and nearly 7% of total stocks are earmarked to leave warehouses.
Also supporting industrial metals was a weaker dollar, which makes metals cheaper for holders of other currencies.