BASE METALS:LME Copper Closes Above $9,000/ton; Jackson Hole Eyed

Aug 25, 2011 LONDON (Dow Jones)--Copper closed above $9,000 a metric ton for the first time in almost three weeks on the London Metal Exchange Thursday as the complex moved higher amid tentative economic confidence and thin trading conditions.

At the close of open outcry trading, LME three-month copper traded at $9,030/ton, up 1.8% on the day.

Technical trading amid slightly more confident market sentiment appeared to drive the gains Thursday, although traders and analysts warned that current thin trading conditions are making market moves more erratic, and upticks more vulnerable to reversals.

"Prices are grinding higher, helped by sporadic short covering, though overall the market remains very quiet," said Leon Westgate of Standard Bank.

Along with nickel, aluminum lagged the complex ending the day just $1 higher at $2,365/ton, continuing a recent trend of falling behind amid broad moves higher.

But despite its lackluster performance Thursday, aluminum remains the best defensive trade of the complex, and should outperform the pack in the event of a serious economic downturn, said BNP Paribas analyst Stephen Briggs.

"We remain convinced that the potential downside is far more limited for aluminium than for other base metals, even, and perhaps especially if the world economy takes a serious turn for the worse," said Briggs. "In a more benign environment, aluminium may remain more sluggish than most, but we expect the price direction to be broadly upward."

Trading Friday is likely to be dominated by anticipation of--and reaction to--U.S. Federal Reserve Chairman Ben Bernanke's speech at the central bank's symposium at Jackson Hole at 1400 GMT, market players said.

If Bernanke announces further monetary stimulus to boost the ailing U.S. economy, base metals could move higher on hopes of a weaker dollar and a flush of liquidity into the world's largest economy.

Prices in dollar a metric ton.
3 Months Metal             Bid-Ask        Change from
                                          Wednesday PM kerb
Copper                   9030.0-9031.0    Up 157
Lead                     2401.5-2402.0    Up 54.5
Zinc                     2228.0-2230.0    Up 51
Aluminum                 2365.0-2366.0    Up 1
Nickel                 20825.0-20850.0    No change
Tin                    23300.0-23350.0    Up 100
Aluminum Alloy           2270.0-2275.0    No change
Aluminum Alloy-NASAAC    2395.0-2400.0    No change