Base metals were largely restrained during Thursday afternoon trade on the London Metal Exchange (LME) amid profit-taking, and contracts ended mixed, traders said. "It is all a bit unpredictable - in fact it changes hour by hour. Copper had a bounce and then it faded, but aluminium was strong," one said. Traders said the jumpy conditions would continue ahead of Friday's US trade data for January, which were expected to show a deficit of $56.5 billion - the second largest on record.
"We'll see what the dollar does in response," the trader added. The euro rose as far as $1.3456, its highest since January 4 on its third day of gains and two cents below record highs set in December. By 1700 GMT it had pared gains and was trading around $1.3407 versus $1.3390 late on Wednesday in New York.
Copper backtracked from its peaks, ending the sessions at $3,250 a tonne in the second rings, down $25 from Wednesday's close, having faltered before a re-test of Tuesday's all-time high of $3,297/3,300.
"The weak dollar seems to be the main driver pushing funds into metals, a situation we believe difficult to sustain," Man Financial analyst Edward Meir said in a report.
"Moreover, there is quite a bit of fund length accumulating in other commodities besides metals, and so a sell-off in any of these areas could have repercussions in metals," he added.
Oil was near record highs, coffee hit a five-year peak and cocoa and other agricultural commodities were also higher on speculative buying.
"We are not calling the peak yet, but we think prices are in for a near-term correction, which will create new opportunities for those looking to buy," Barclays Capital analyst Ingrid Sternby said in a report.
"A bearish signal could easily prompt mass long liquidation and take prices sharply lower over a short period of time...Underlying support remains solid, however, evident from firm physical premiums."
Aluminium recorded a positive close, ending at $2,006, up $4, after touching a 10-year peak of $2,015.
"Aluminium is the flavour of the moment. It does need to close above $2,105, and then it is off to the races," the trader added.
Zinc was unchanged at $1,430, easing from an earlier 7-1/2-year high of $1,440.50. Lead was $2 lower at $973, nickel fell to $15,955 from $16,100, while tin was at $8,540, up $110.
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