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Copper higher

on good fund buying

NEW YORK: Comex copper settled higher after funds moved in to buy December during the morning.

"Fund buying, especially in December Comex, was very evident," said a trader. "The general picture for copper looks healthy. From a technical standpoint the market held its ground."

But a floor source cautioned that today's rally could be part of the rollover. "Maybe the funds decided to buy December now and sell September later," he said.

September Comex closed at 138.95, up 2.45 cents a lb, traded 139.65 to 137.00 cents a lb. December closed at 135.10, up 2.40 cents a lb.

Estimated volume leapt to 12,000 lots versus yesterday's official 4,637 lots. Switches were estimated at 333.

Merrill Lynch's William O'Neill said the run up to $3,000 a tonne on LME copper on big U.S. fund buying was decisive. Going out on a high "portends for additional strength despite some trade selling at the top end," O'Neill said.

The market is demand driven and poised to go higher above the September contract's high of 141.70 cents a lb, especially as the market gets to October and consumption gathers strength, O'Neill said.

The trader said the market has to rise at least 2 cents a lb to lure the funds back, and they would probably buy less with each upward move in a "pyramid" buying strategy.-Reuter