Copper Advances to 10-Month High on Improving Economic Outlook

NEW York,&nbsp;July 28&nbsp;-- Copper jumped to the highest price since October and aluminum posted the longest rally since 2004 on signs of improved prospects for global metal demand.
&nbsp;&nbsp;&nbsp; Purchases of new homes in the U.S. surged 11 percent in June, the biggest gain in eight years, the Commerce Department said today. German consumer sentiment for August rose for a third month, and July consumer confidence in South Korea reached an almost seven-year high. Copper has surged 81 percent this year.
&nbsp;&nbsp;&nbsp; &quot;People are buying copper as they're seeing that the economy is doing better than they had expected,&quot; said Gijsbert Groenewegen, a partner at Gold Arrow Capital Management in New York. &quot;Better sentiment is driving the metals market.&quot;
&nbsp;&nbsp;&nbsp; Copper futures for September delivery rose 2.3 cents, or 0.9 percent, to $2.545 pound on the Comex division of the New York Mercantile Exchange. Earlier, the price reached $2.579, the highest for a most-active contract since Oct. 7.
&nbsp;&nbsp;&nbsp; Aluminum prices in London rose for the 10th straight session, the longest rally since December 2004.
&nbsp;&nbsp;&nbsp; &quot;Sentiment in the base-metals sector is good,&quot; said Eliane Tanner, an analyst at Credit Suisse Group AG in Zurich. &quot;More and more commodity markets will see positive demand- growth numbers in the months ahead.&quot;
&nbsp;&nbsp;&nbsp; The London Metals Index, a gauge of six industrial metals including copper, aluminum and tin, has surged 55 percent this year on speculation that the worst of the global recession has passed. Government stimulus spending also has spurred metal demand in China, the world's biggest buyer.
&nbsp;&nbsp;&nbsp; Sustainable Growth? 
&nbsp;&nbsp;&nbsp; &quot;The question for the market now is sustainability,&quot; Groenewegen said. &quot;If the buying in China translates into usage in the economy, that will keep prices high. If that's not the case, and it is simply a buildup in inventories, then you have a problem.&quot;
&nbsp;&nbsp;&nbsp; On the London Metal Exchange, copper for delivery in three months rose 1.4 percent to $5,600 a metric ton ($2.54 a pound).
&nbsp;&nbsp;&nbsp; Aluminum climbed 1.1 percent to $1,826 a ton. Earlier, the price reached $1,874.50, the highest since Nov. 19. The metal has gained 19 percent this year.
&nbsp;&nbsp;&nbsp; &quot;We believe that aluminum prices continue to be on track to visit our next target of $1,900 to $2,000 by year-end or as early as September,&quot; Laredo, Texas-based research company Harbor Intelligence said in a weekly note.
&nbsp;&nbsp;&nbsp; Tin, lead, zinc and nickel also rose in London.
&nbsp;&nbsp;&nbsp; (Source: Bloomberg)
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