Comex Copper Locks in Gains

Oct 11, 2012 (Dow Jones) NEW YORK--Copper futures settled higher Thursday, as a drop in weekly unemployment data and a stronger euro bolstered investor confidence.

The most actively traded contract, for December delivery, rose 3.35 cents, or 0.9%, to settle at $3.7515 a pound on the Comex division of the New York Mercantile Exchange. This broke the contract's three-day streak of ending trade at $3.7180 a pound, which began Monday.

The number of U.S. workers filing new claims for jobless benefits unexpectedly declined by 30,000 to a seasonally adjusted 339,000 in the week ended Oct. 6.

Copper prices rallied on the data, following equity markets higher, as some investors cheered signs of improvement in the labor market while others moved to close out bets on lower prices made amid copper's three-day lull, said Matt Zeman, head of trading at Kingsview Financial.

"It's interesting that this comes along after Friday's jobs number and just before the presidential election," he said, adding that he's on the look-out for "crazy tweets."

Markets were roiled last week, when the monthly labor market report said the unemployment rate fell to 7.8% in September from 8.1% in August, prompting former General Electric chief executive Jack Welch to tweet that the current administration had meddled with the data.

Copper prices also got a boost from a stronger euro, which pressured the dollar lower. Copper is traded in dollars and becomes cheaper to buyers who hold other currencies when the dollar weakens.

The euro was recently up 0.5% at $1.2934 as investors hoped that Spain will ask for rescue financing after credit ratings company Standard & Poor's slashed its borrowing grade two notches to just one step above junk.

Mr. Zeman added that with copper moving beyond the $3.70 level, futures are likely to make another attempt at breaching above the $3.80 to $3.83 resistance level, which has been an impediment to a robust rally in recent weeks, he said.

Copper settlements (ranges include electronic and pit trading):
Oct $3.7590; up 3.00 cents; Range $3.7050-$3.7865
Dec $3.7515; up 3.35 cents; Range $3.6920-$3.7785