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Comex copper ends firmer, aided by funds

NEW YORK: Comex copper futures on Tuesday surged to chip away at resistance levels as London Metal Exchange (LME) stocks fell and prices there regained a foothold above $1,800 a tonne, sources said.

Funds and futures firms were seen fortifying long positions as copper persevered to break up through key levels in New York and London business.

"Obviously there is some good buying in there," said one New York broker. "London has been offered at $1,807 (a tonne). Now it is right around the level of this 100- day moving average, so that's what they are trying to shoot for."

All contracts settled 1.10 cents firmer, with active May reaching 81.85 cents a lb, trading between 80.50 and 82.20, and spot March up at 81 cents.

Pioneer Futures technical analyst Scott Meyers said that May copper enters a gap above stiff near-term resistance at 82.25 cents a lb.

"If we happen to come in higher, 82.70 would be my first level, but a settlement over that level and I think you are probably going to work toward 85 (cents)," Meyers said.

Meyers said he saw a double-bottom near Monday's low of 80.60 in May as good support for copper in the near-term.

On Tuesday, LME stocks diminished a further 9,100 tonnes to 796,100 tonnes, while Comex stocks fell 127 short tons to 96,323 tons on Monday.

Consulting firm J.E. Gross & Associates estimated the combined Comex and LME inventories of copper at 973,872 short tons, slightly reduced from last month's record peak at one million-plus short tons.

Industry sources predicted consumption to grow as China ramps up refined copper imports, and a bright economic outlook in Europe encouraged demand for the red metal.

In London, LME three-months copper closed at $1,802 a tonne, up $20 from Monday's settlement price, on a boost from Comex fund buying.

The nine-day relative strength index (RSI) for May copper reached 64 at the close on Tuesday.

Technical analysts usually interpret an RSI reading at 70 or higher as overbought conditions and 30 or below as oversold.

Comex copper had final estimated volumes of 13,000 contracts, against the previous official tally of 7,490 lots on Monday.

Comex is a division of the New York Mercantile Exchange.ÑReuters