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Comex Copper Stops 2-Day Losing Streak

iconSep 20, 2012 09:38
Source:SMM
Copper futures locked in their first gain in three trading days Wednesday as a slew of stronger U.S. economic data bolstered overnight gains.

Sep 19, 2012 (Dow Jones) NEW YORK--Copper futures locked in their first gain in three trading days Wednesday as a slew of stronger U.S. economic data bolstered overnight gains made on Japan's monetary easing effort.

The most actively traded contract, for December delivery, rose 2.70 cents, or 0.7%, to settle at $3.8140 a pound on the Comex division of the New York Mercantile Exchange.

The Commerce Department said U.S. housing starts rose 2.3% last month from July. Meanwhile a report from the National Association of Realtors showed that sales of previously owned homes jumped 7.8% in August from a month earlier.

"Record low mortgage rates and a good supply of more 'affordable' properties are the main contributing factors," said brokers at Sucden Financial in a note to clients.

Copper electrical wires and plumbing pipes are widely used in construction, and stronger activity in the housing sector is widely seen as a supportive factor for future copper demand.

Earlier in the day, the Bank of Japan said it will boost its asset purchasing program by Y10 trillion as it targets the country's slowing growth. The BOJ joins the European Central Bank and the U.S. Federal Reserve, which have also announced new stimulus measures in recent weeks.

"The pace of buying was really lifted after the Japanese move to boost its asset purchase program," said traders at RBC Capital Markets in a note to clients.

"The flood of liquidity coming into the system should be a boon for metals such as aluminum and copper as the pace of the consumer whether it's buying homes or durable goods should be lifted," they said.

The day's upbeat data stoked risk appetite helping copper prices to recover from two consecutive days of losses. Some investors had been moving to lock in gains made on a two-week rally which lifted prices nearly 11% this month.

Copper settlements (ranges include electronic and pit trading):
Sept. $3.8290; up 2.65 cents; Range $3.8040-$3.8485
Dec. $3.8140; up 2.70 cents; Range $3.7830-$3.8395

 

Comex copper
Japan monetary easing

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