Copper ended a touch higher on Friday, as a weak dollar and steadier tone in equities helped prices withstand the bearish impact of cloudier economic prospects and a potential Greek default. The gains helped copper push into the plus column for the week, its first positive weekly close in three weeks.
But with further evidence of economic malaise in the United States, worries about the fallout from the European debt crisis and uncertainties surrounding Chinese buying patterns this year, copper prices were expected to remain vulnerable to downside pressure, analysts said. "The dollar is helping foster some support, but this market is still pretty much contained in a trading range until we get a better handle on the Greek crisis and Chinese demand requirements," said Steve Platt, futures analyst with Archer Financial Services in Chicago.
London Metal Exchange (LME) benchmark copper peaked at $9,189 a tonne, before ending the day up $30 at $9,095. In New York, prices failed to maintain their earlier momentum as equities trimmed their gains late. The key September COMEX contract shed 1.50 cents to settle at $4.1210 per lb. Ranges continued to narrow over the past few weeks, keeping prices teetering just above the 200-day moving average.
"It's a classic defined wedge that is getting tighter each day. You could have a breakout on either side," said Scott Meyers, senior trading analyst with Pioneer Futures in New York Prices managed to hold even as data showed US consumer sentiment worsened this month. Copper inventories fell for a fifth straight day, data showed on Friday, shedding 1,325 tonnes to stand at 470,825 tonnes.
The copper contango, which generally indicates supply exceeds demand in the near term, has narrowed from a nine-month high of $30 in early May to $8.50 a tonne. Nickel fell to a session trough at $21,525 a tonne, its lowest since November 23, before recovering to end up $70 at $21,675.