Though COMEX copper prices finished on Wednesday's early session with only a modest rise, those gains took the red metal to a year-end close at levels last seen in August 1997, as thin conditions allowed bullish speculators to rule the day, copper traders said.
The sliding dollar and healthy US jobless claims provided a strong enough underpinning that copper prices were able to withstand the short bout of profit taking at the session peak.
"It was thin. There wasn't much there. They brought it up. They took it down. But, it's lovely that we're closing the year on the highest price of the year," said one copper trader.
The New York Mercantile Exchange and its COMEX division will be closed on Thursday and Friday for the New Year's Day holiday.
The exchange closed around noon EST on Wednesday.
COMEX March copper closed 2003 at $1.0455, up 0.25 cent per lb., a level unseen for 6-1/2 years. It reached a new contract high near the open of $1.0510. The low was $1.0425.
January futures took over as spot position on Wednesday. It ended 0.30 cent higher at $1.0430. Only a few other contracts traded, but all that did set new contract highs.
COMEX estimated final copper volume at 8,000 lots, after a similar 8,641 tally was logged on Tuesday.
Open interest fell 772 lots on Tuesday to 89,485 lots.
Whether red metal prices can hold their peaks next week in a more robust trading environment remains to be seen.
When asked, one trader said, "I don't know, but most people are pretty bullish. That's what I've seen."
He added that the technical charts, too, back up an argument for the copper rally to continue on Monday.
Copper was helped early on when the Labour Department reported that new applications for US state jobless benefits hit their lowest level in nearly three years. The report fanned hopes of sustained growth in the US labour market.
One analyst said of the 339,000 new claims reported in the December 27 week, "You're well within the range that you'd expect in a growing economy, even in a briskly growing economy."
Dollar weakness has contributed to copper's spectacular rise in recent months, and the US unit slid to another record low against the euro, an 11-year low against the British pound, and fell sharply against the Swiss franc on Wednesday.
Holiday-thinned volumes left the greenback vulnerable to investor concerns over unprecedented safety precautions for the New Year holiday as well as the US current account deficit.
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