US copper futures reversed losses and closed firm on Monday, with a stronger London base metals complex and stabilising equities enabling the industrial metal to rebound from last week's risk aversion sell-off, analysts said.
"I think you got a little bit of support from its brethren over on the LME (London Metal Exchange), with tin making an all-time high over $16,000 a tonne," said Mike Zarembski, senior commodities analyst and broker with OptionsXpress, Inc in Chicago.
Copper for September delivery settled up 4.15 cents to $3.5885 a lb. on the New York Mercantile Exchange's Comex division, after dealing between $3.5005 and $3.5980. Traders noted the market's inability to break below key support at the $3.50 level yielded further momentum to the price reversal.
"We're kind of forming a solid bottom right around that $3.50 area it just doesn't want to go through there, so I think that was a little bit of a supportive factor as well today," one said. Futures volumes estimated just before the close, reached 6,999 lots, compared with Friday's final count of 12,910 lots.
Open interest in Comex copper futures fell 1,686 lots to 88,894 contracts as of July 27. US stocks rose in choppy trade on Monday following Wall Street's worst week in nearly five years as optimism about the earnings outlook offset concerns about the deteriorating credit market.
The Dow Jones industrial average was up 72.51 points, or 0.55 percent, at 13,337.98. News that workers at Group Mexico are massive Cananea copper mine in northern Mexico were set to walk off the job on Monday provided additional support.
As of July 24, open interest increased to 94,496 lots compared with 89,893 lots a week. London Metal Exchange copper for delivery in three months ended up $75 to $7,825 a tonne from Friday, when it slid to $7,705, its lowest level since July 17.
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