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Comex copper futures end flat on mixed interest

NEW YORK: Comex copper futures see-sawed throughout the day amid a mix of fund buying countered by fund and producer selling. After staging an almost daily rally, the market moved into consolidation as it aimed to cement higher ranges, according to traders.

Fund buying has steadily prodded prices higher but producer selling at the upper end of the range continues to prompt these consolidation tendencies.

"Most of the move (this week) was done on anticipation of demand along with some overall commodity strength," said David Meger, metals analyst at Alaron Trading.

"There was a little fadeback down to the 86.80 level. Most of these dips are still being viewed by funds as buying opportunities. It was more of a consolidation-type day," he added.

Floor traders said a breakout above 89.20 would have sent prices up through 90.00 cents but cautioned that a close below Wednesday's low of 88.30 cents could push prices further down.

Active March closed unchanged at 87.30 cents a lb after trading between 86.80 and 88.10 cents. January ended 0.05 cent firmer at 86.65 cents and February settled flat at 86.80 cents.

"There are a lot of traders worrying that this market is near-term overbought. We're currently sitting on a situation of near-term oversupply," said Meger. "We're really seeing a fight between this fund buying that's been driving this market and producer selling because, right now, these prices are looking quite attractive to producers."

Resistance levels are now settling into 88.50 up to the 89.00 cents for March delivery, after steadily rising all week.

Open interest in the March contract continues to soar, sitting at around 60,000. The market had been gaining strength on rising demand sentiment and a stellar performance by aluminum.

But aluminum prices have simmered down to close off $12 at $1,728, after setting 29-month highs earlier in the week.

LME copper also drifted lower on light interest to end the day at $1,919 a tonne, off $4. Dealers are cautiously eyeing support at $1,910.

Final estimated volumes reached 12,500 contracts, compared with final offical volumes on Thursday of 11,143 contracts, and an official turnover of 12,272 contracts on Wednesday.

Thursday's sell-off pushed the nine-day relative strength index for March copper down to 69 at the close of business Thursday. At the close of business Friday, the RSI eased slightly further to 61.

Technical analysts usually interpret an RSI reading of 70 or higher as indicating overbought conditions and 30 or below as oversold.-Reuters