Oct 21, 2011 NEW YORK (Dow Jones)--Copper snapped a four-day losing streak to finish higher Friday as optimism about the weekend European Union summit lured buyers back to the market.
The most actively traded contract, for December delivery, settled 16.55 cents, or 5.4%, higher at $3.2230 a pound on the Comex division of the New York Mercantile Exchange.
Thinly traded October-delivery copper rose 16.45 cents, or 5.4%, to settle at $3.2190 a pound.
Copper futures have been kept hostage by developments in Europe, as fears of a European summit delay sent prices down more than 6% in Thursday trade while hopes of a resolution prompted Friday's bounce.
European leaders are due to meet in Brussels over the weekend to discuss plans for stemming the region's sovereign debt crisis. However, a comprehensive accord on expanding the size and reach of the region's bailout fund has been delayed until a second summit on Oct. 26, to give European Union leaders more time to reach a consensus.
"If we see a sizeable enough package announced, the fears of the banking crisis will dissipate and that should provide a solid boost to copper prices," said Barclays Capital metals analyst Nicholas Snowdon.
Europe is a major copper consumer, often second behind top consumer China, and many market participants worry that a sovereign debt default could trigger a credit crisis and stymie economic growth. Copper is used in everything from laptops and air conditioners to household plumbing, and demand for such goods tends to wilt as economic activity slows.
A weaker dollar fanned demand for copper futures among buyers who use foreign currencies. Copper futures are priced in dollars and appear cheaper to these market participants when the greenback eases.
The ICE Dollar Index slipped to 76.530 recently, from 76.936 late Thursday in New York.
Copper settlements (ranges include electronic and pit trading):
Dec $3.2230, up 16.55 cents; Range $3.0770-$3.2405