Apr 20, 2012 NEW YORK (Dow Jones)--Copper futures climbed on Friday, taking cues from gains in other markets and the view that demand for the industrial wasn't bleak enough to justify the three-month lows hit early this week.
The most actively traded contract, for May delivery, rose 7.05 cents, or 1.9%, to settle at $3.698 a pound on the Comex division of the New York Mercantile Exchange.
Copper futures touched their lowest intraday price since mid-January on Monday, as traders dumped the growth-sensitive asset after a disappointing reading on Chinese economic growth and worries that tremors in Spain's bond market heralded renewed risk of a European financial crisis. The market spent the following days confined largely to sideways trading, holding within striking distance of fresh lows.
But demand for the metal, which is still widely expected to exceed available supply this year despite slowing growth in top consumer China, made investors wary of betting on further declines in copper, said Bill O'Neill, a principal with commodities firm Logic Advisors.
"Demand is better than people are giving credit for," O'Neill said. "There's too much gloom and doom. I do think we're still headed for a significant production deficit this year."
Analysts said prices were also supported by hopes that China's government would take new steps to support growth there, potentially propping up copper demand.
Upbeat readings on German business confidence and U.K. retail sales also drew buyers to copper and other growth-sensitive assets on Friday.
Copper, used in construction and manufacturing, is sensitive to such economic data. Its broad applications make copper prices vulnerable to shifts in economic data, as a slowdown in business activity is considered a signal of lower future demand for the industrial metal.
"Any type of news that doesn't seem catastrophic in this environment will lend support to equities and to metals," said Adam Klopfenstein, market strategist with Archer Financial Services.
"It doesn't take a whole lot to make people comfortable because expectations have been cut down so low," he added.
The U.S. dollar, which can slip against other major currencies when investors are comfortable with perceived risky assets, on Friday touched its lowest level since April 3. Copper futures are denominated in dollars and the contracts appear less expensive to investors who use other currencies when the dollar eases.
During the week, copper futures advanced 2%, the first weekly gain since the week ended March 30.
Copper settlements (ranges include electronic and pit trading):
Apr $3.6960; up 6.95 cents; Range $3.6410-$3.7070
May $3.6980; up 7.05 cents; Range $3.6245-$3.7125