US copper futures lurched up to 5-1/2-week highs before the close on Wednesday, with funds taking their cue from strong fundamentals, traders said. Copper spent the first part of the session at sharply lower levels as traders sold when the dollar hit 7-1/2-month highs against the euro, and knocked copper off peaks reached late in the previous session did. But analysts said they were noticing a significant shift in how players are viewing copper these days.
"Copper started with a round of profit taking, but then it gained momentum, even with the dollar strength. It's flagging the news that fundamentals are doing well.
It's playing more into the hand of (rallying) Dow (Jones Industrial) stocks as opposed to negativity coming from the euro," said Scott Meyers, senior trading analyst at Pioneer Futures.
At the New York Mercantile Exchange's Comex division, copper for July delivery finished up 2.90 cents at $1.4855 a lb., after trading as high as $1.4880 from a low at $1.44 per lb.
The July futures high dates back to April 26. Spot June copper surged 3.30 cents to $1.5380 a lb. The rest all settled from 2.35 to 2.60 cents higher.
"As long as the stock market stays firm, I think copper will stay firm with it. I think it's up, up and away," said Meyers, who predicted $1.50 per lb. in July futures on Friday.
Comex estimated final copper volume at 29,000 contracts, more than the 16,900 lots traded on Tuesday. A rising dollar can eat into profits on dollar-denominated assets like copper for overseas investors, which caused selling in the session.
London Metal Exchange copper fell by 900 tonnes on Wednesday to 44,325 tonnes, near historically low levels. At Comex warehouses, stocks fell by 404 short tons on Friday to 22,474 tons.
LME three-month copper ended at $3,095 per tonne at the on Wednesday evening kerb, up from Tuesday's close at $3,046. The range extended up to $3,113 a tonne from a low at $3,025.
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