US copper futures teetered around unchanged on Friday, with traders saying they thought heavy selling this week had run its course, but the resurgent dollar was limiting any attempts to the upside. July futures hit new 3-month lows on Friday, but activity was light and prices were only moderately lower. "We came in this morning continuing the selling (from Thursday) a little bit, but not enough to keep it down. Even on more selling in London it could not stay down. So I think we're coming back," said one broker. At the COMEX division of the New York Mercantile Exchange, benchmark July copper was off 0.60 cent at $1.37 a lb., but fluctuated around unchanged in a $1.3625-$1.3850 range.
On Thursday, July futures tumbled nearly 5 percent to $1.3710, a bottom last seen on February 11.
"We're a little lower now, but I think its going to start getting higher, because it seems like the funds are done with their selling for now," said another trader.
Spot May copper was down 0.15 cent at $1.4540 per lb. Other contracts ranged from down 0.55 to up 0.40 cent. COMEX estimated 10 am copper volume at 8,000 lots.
During a massive sell off on Thursday, copper slid through several stop-loss sell areas. Traders said they thought that was enough to strip out most of the euro/dollar premium in copper prices that drove it to the April 12 high at $1.5360. a level last seen in March 1989.
"The funds came in yesterday selling everything. A lot of them had established long positions over time. They're still a little long, but I think they're finished with their selling for the most part now," said another copper trader.
Traders said they thought the red metal may now start responding more to fundamental factors.
"Funds that were betting copper against the dollar have pretty much gotten out. For the third day in a row the euro's getting creamed and it's not having much affect on copper. That's one reason why I think the selling may have run out," said a trader.
The dollar hit a seven-month high against the euro on Friday, after recent robust data raised optimism about the US economy. Upbeat retail sales on Thursday followed an improved trade deficit on Wednesday and a surprisingly strong jobs report last week, allaying fears .
Persistent dollar strength has undermined funds' long copper positions recently. A stronger dollar typically makes dollar-denominated assets like copper more expensive for holders of other currencies.
London Metal Exchange three-months copper retreated to $3,020 per tonne, a level last visited on February 10, but steadied at $3,039, down from $3,196 at Thursday's close.
Comments
Comments are closed.