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Comex Copper Gains With Euro in Light Trade

iconOct 31, 2012 08:43
Source:SMM
Copper prices rebounded on Tuesday, propped up by upbeat European equities markets in thin trading conditions in the wake of Hurricane Sandy's impact on the northeast U.S.

Oct 30, 2012 (Dow Jones) NEW YORK--Copper prices rebounded on Tuesday, propped up by upbeat European equities markets in thin trading conditions in the wake of Hurricane Sandy's impact on the northeast U.S.

Trading volume was much lower than normal on Tuesday. New York Mercantile Exchange floor trading remained shut for a second session after Monday evening's impact of Hurricane Sandy, but electronic trading continued as normal.

The exchange's headquarters in Manhattan is located in an area that was subject to mandatory evacuation ahead of the deadly storm, which caused damage from North Carolina to New England and left millions without power.

Copper for December delivery, the most-actively traded contract recently traded up 2.05 cents, or 0.6%, at $3.515 a pound on the Comex division of the New York Mercantile Exchange.

"With U.S. markets still closed today, the metals look likely to trade sideways," said Leon Westgate, an analyst with Standard Bank, said in a note. He added that industrial metals were drawing some support from strength in European equities markets and a stronger euro.

Copper and equities, both seen as growth-sensitive assets, tend to trade in tandem, and a stronger euro against the U.S. Dollar can boost copper by making dollar-denominated futures appear cheaper for holders of the European common currency.

Sentiment in Europe was lifted on Tuesday by better-than-expected Spanish growth data, and easing borrowing costs for Italy and Spain.

Copper also was lifted briefly overnight by the news that China's central bank had injected a record amount of money into the financial system. China is the world's largest copper consumer, and traders have kept a close watch on how much support Beijing gives to its slowing economy for signs of shifts in copper consumption.

But Tuesday's money-market move by the People's Bank of China was expected, and widely seen as an effort to help banks meet end-of-month capital requirements, instead of an effort to boost the economy by pumping liquidity into the financial system.

Copper on Monday had slipped for an eighth consecutive session, settling at the lowest price since Sept. 4 as weakness in European and Asian equities markets and a stronger dollar hit sentiment.

 

Comex copper
equity markets

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