Copper futures in New York settled with healthy gains on Friday as chart-based buying boosted prices, extending a midweek technical bounce, sources said. However, further upside potential remained to be seen, given the market's extreme volatility, they said.
"We have had a pretty good shake-out lately, and we're still in a fairly wide band of tolerance, with a $3.15 to $3.20 support area and a $3.65 to $3.70 top, which has been going on since June.
So it looks neutral to bullish right now," said Scott Meyers, senior-trading analyst at Pioneer Futures in New York. Copper for December delivery settled up 8.85 cents, or 2.7 percent, at $3.3885 a lb. The New York Mercantile Exchange's Comex division, after dealing between $3.2925 and $3.4250. Spot October rose 8.40 cents to finish the day at $3.3835, after dealing from a low of $3.3050 to $3.3925.
Volume just before the close was estimated at 10,000 lots, against on Thursday's official count of 8,875 lots. The market's choppy price action had some players on the fence, questioning whether this week's technical rebound could build momentum heading into next week.
"We can see $3.50 next week, but we can also see $3.30 again. So you just have to be aware that the volatility is picking up and that is something we are going to have to contend with for a while," Meyers said. Meanwhile, a surprisingly weak US jobs report for the month of September, coupled with a stronger dollar, had little effect on the copper market on Friday.
The Labour Department said US employers added a mere 51,000 jobs in September its weakest gain since October 2005, and far below market expectations for 125,000. The report also showed the unemployment rate dipped to 4.6 percent from 4.7 percent in August. The dollar rallied to a 10-week high against the euro on Friday, after sharp revisions to US jobs growth in August eased worries of a decelerating economy.
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