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Copper Ends At One-Week High on Hopes of Easing
Jul 30,2012 08:59CST
industry news
Copper prices locked in a three-day winning streak Friday, as markets hoped that the Fed will take steps to boost the economy next week.

Jul 27, 2012 (Dow Jones) NEW YORK--Copper prices locked in a three-day winning streak Friday, as hopes that the Federal Reserve will take steps to boost the economy next week overpowered concerns that recent economic data beat expectations.

The most-actively traded contract, for September delivery, gained 3.25 cents, or 1%, to settle at $3.4260 a pound on the Comex division of the New York Mercantile Exchange. This was the highest settlement price since July 20.

The U.S. economy expanded at a pace of 1.5% during the second quarter, exceeding consensus expectations of 1.3% growth, according to data from the Commerce Department.

However, second-quarter growth was a marked step down from the upwardly revised 2.0% increase in U.S. gross domestic product registered during the first three months of 2012, and well below the 4.1% rate in the fourth quarter of 2011.

Copper prices had initially retreated on the data, as concerns that the better-than-expected report would stay a policy shift by the Fed permeated markets. Copper's widespread applications in general manufacturing, construction, electronics, automotive production and other applications make it sensitive to shifts in economic outlook.

However, copper futures recovered later in the day as investors sifted through the report and renewed their hopes of fresh easy-money measures from the Federal Open Market Committee.

"There are already whispers indicating growing optimism that the U.S. Fed could give confirmation of additional stimulus at the FOMC meeting next week," traders at RBC Capital said in a note to clients.

The central bank's policy-setting committee is due to hold a two-day meeting starting Tuesday.

Copper settlements (ranges include electronic and pit trading):
Aug $3.4260; up 3.25 cents; Range $3.3885-$3.4300
Sep $3.4260; up 3.25 cents; Range $3.3790-$3.4390


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Comex copper prices
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