Aug 25, 2011 NEW YORK (Dow Jones)--Copper futures climbed to their highest levels in more than two weeks Thursday as traders were reluctant to hold bets that prices would fall ahead of Friday's speech by Federal Reserve Chairman Ben Bernanke.
The most actively traded copper contract, for September delivery, rose 8.10 cents, or 2%, to $4.079 a pound on the Comex division of the New York Mercantile Exchange, the highest settlement price since August 5.
Traders are also looking ahead to Bernanke's scheduled speech Friday at the Fed's annual retreat in Wyoming.
Some market participants are hoping Bernanke will hint at further support for the struggling U.S. economy, though Fed watchers say the chances of such an announcement are slim. That hasn't been enough to stop a trickle of speculative buying this week in assets such as stocks and commodities, however.
"We are unsure as to how markets will react to Chairman Bernanke's speech should he fail to provide the extra stimulus that the markets may be looking for," MF Global analyst Edward Meir said in a note. "The tempting conclusion is to suggest a sell-off would ensue ... but the markets could easily rally as well, as investors may interpret a more measured approach as a signal that the Fed believes the economy is capable of recovering on its own."
Copper futures fell from near $4.50 a pound to below $3.90 earlier this month as signs of stumbling growth rattled global markets and hit the demand outlook for the metal. But futures in recent weeks have found support near the $4 mark as equities markets have stabilized and traders bet that copper demand won't slip as much as was feared.
The metal is sensitive to the economic growth outlook because of its widespread uses in construction and industry, and copper can track equities markets as proxies for the economic outlook when there is little in the way of copper-specific news.
"Unless all of the world's economies get thrown off, copper is a commodity that has built some support" near the $4 level, said Ira Epstein, director of the Ira Epstein division of the Linn Group. "I wouldn't get short copper now. But I'm not sure I'd want to be long, either."
Copper settlements (ranges include electronic and pit trading):
Aug $4.0790; up 8.20 cent; Range $4.0610-$4.0940
Sep $4.0790; up 8.10 cent; Range $3.9975-$4.1040