LONDON, Aug. 5 -- Copper prices surged to a 10-month high after a report showed the number of contracts to buy previously occupied U.S. homes rose for a fifth month.
Pending home resales rose 3.6 percent in June, an industry group said today. Economists forecast a 0.7 percent gain, the median of 35 projections in a Bloomberg News survey. Builders are the biggest U.S. users of copper, putting about 400 pounds (181 kilograms) in the typical home. The metal has surged 98 percent this year on speculation that global demand will climb.
"The general trend is higher," said William O'Neill, a Logic Advisors partner in Upper Saddle River, New Jersey. "The economic data are improving, and that's drawing in greater money flow."
Copper futures for September delivery jumped 5.7 cents, or 2.1 percent, to $2.7955 a pound on the Comex division of New York Mercantile Exchange. Earlier, the metal reached $2.799, the highest for a most-active contract since Oct. 2.
Stockpiles monitored by the London Metal Exchange climbed 1.3 percent to 285,900 metric tons today, advancing for a third straight session, a possible harbinger of a decline in the price.
"Stocks in copper have been rising for several weeks," said Eugen Weinberg, an analyst at Commerzbank AG in Frankfurt. "Future strong moves in prices will be on the downside."
Commodity hedge funds' assets under management increased 8.9 percent in the second quarter to almost $11 billion, according to Chicago-based Hedge Fund Research Inc.
"From a supply-and-demand perspective, copper prices are overbought," O'Neill of Logic Advisors said. "But the markets are now looking forward, and the price is being driven by sentiment and money flow."
On the LME, copper for delivery in three months rose $50, or 0.8 percent, to $6,050 a ton ($2.74 a pound). Among other metals traded on the LME, aluminum, zinc and nickel rose, while lead and tin declined.