Jun 18, 2012 (Dow Jones) NEW YORK--Copper futures edged higher Monday in a late-session climb, bolstered by a brief tick higher in equities, as investors continued to monitor developments in the euro zone.
The most actively traded contract, for July delivery, settled 1.20 cents, or 0.4%, higher at $3.3955 a pound on the Comex division of the New York Mercantile Exchange.
Copper prices spiked during Asian trading hours, taking cues from relief across markets after a pro-austerity party's victory in Greek elections assured that the country won't suddenly exit the euro zone. Investors had cut back holdings of growth-sensitive assets like copper on concerns that a swift Greek exit would weaken Europe's financial system.
However, copper prices wobbled throughout the day, as investors worried about rising borrowing costs in Spain and Greece's ability to form a coalition government and secure further funding from its euro-zone partners.
"It was a session where we got what we expected and the market just kind of held in," said Bill O'Neill, a principal with Logic Advisors. "I don't think there's anything copper specific in the rally; we didn't get the worst-case scenario and equities didn't tank," Mr. O'Neill added.
Copper prices recovered some of their gains during the final hour of trading, as an uptick in equity markets strengthened investor sentiment. Copper and equities are seen as sensitive to shifts in economic outlooks and often move in the same direction.
Market attention has shifted to the Group of 20 nations meeting in Mexico and the Federal Reserve's policy-making meeting on June 19-20, said Leon Westgate, a metals strategist with Standard Bank. Investors are hoping to see news "regarding political involvement in the current crisis, and the potential for additional [easing] measures," he said.
Elsewhere, Chile's central bank cut its 2012 copper price forecast and now expects the industrial metal to average $3.55 a pound this year, down from $3.70 a pound. Copper is Chile's main export, representing 15% of the country's gross domestic product and 60% of exports. Chile accounts for about a third of the world's copper output.
Copper settlements (ranges include electronic and pit trading):
Jun $3.3960; up 1.10 cents; Range $3.3785-$3.3985
Jul $3.3955; up 1.20 cents; Range $3.3675-$3.4775