COMEX copper fell sharply late in Monday's session, when a mild bout of profit-taking gave way to heavy selling as funds and speculators took their cue from tumbling equity markets and unloaded copper positions.
"The investment funds were lightening up a little bit. I think it was profit-taking, and the Dow being down as sharply as it is. You have this whole terrorist grip in the market," said AG Edwards metal market commentator, Jimmy Quinn.
Traders said that some fund players decided to grab quick profits after copper's run-up last Friday to its highest level since March 2 at $1.3880 a lb. on the active May contract.
But the violent geopolitical situation was also causing volatility in equities and industrial metal markets.
"You're seeing flight to quality buying in gold and silver. You're not seeing it in the industrial metals," Quinn said.
Benchmark May copper tumbled 2.50 cents to end at $1.3530 per lb., but slid as low as $1.3500 from $1.3850.
Spot March fell 2.40 cents to finish at $1.3550 a lb.
Only a few of the rest actually traded, but they settled across the board with losses of 1.60 to 2.60 cents.
Referring to the CFTC's Commitment of Traders report released on Friday after the close, Pegasus analyst Tim Evans said in his Weekly Metals Outlook that the reduction of net length from the extreme set last October at 48,382 or even the contract level of 28,887 of February 17 left room for "a possible mini-cycle of fresh buying."
He added, however, that he did not expect a flood of buying, because the market was more fully valued now than it was back in October. Copper hit an 8-1/4 year peak on March 2 when it reached $1.4030 a lb.
Some chartists said they saw first resistance in benchmark COMEX May futures at the psychological $1.40 mark, the March 2 high at $1.4030, and a new peak at $1.4610, a spot high from July 1995. Support was pegged at $1.34 and $1.30.
Monday's action was initially thin but picked up once sellers came out in force. COMEX estimated final turnover at 20,000 contracts, compared with a meager 5,217 lots traded on Friday. Friday's open interest fell by 562 lots to 77,131.
In a weekly newsletter, a Societe Generale analyst pointed out that a combination of continuous declines in LME warehouse stocks and "unstoppable Asian demand could be the mix for prices that go a lot further than most players expect."
LME copper stocks fell 4,875 tonnes on Monday to 218,925.
London Metal Exchange 3-months copper ended Monday's evening kerb at $2,965 a tonne, down sharply from the high at $3,020 and well below the Friday's close at $3,004.
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