Base metals closed firmly on the London Metal Exchange (LME) on Monday, but off earlier peaks in low-key trading on the first day of LME dinner week, dealers said.
"Most metals look fairly positive, except for nickel. Copper is trading sideways," one trader said.
Three-month LME copper futures closed at $3,912 a tonne versus $3,878 on Friday. Copper traded as high as $3,946 at midday.
"The market is incredibly thin today and with so many people away from their desks, if you blink, the market can rise or fall $50. I wouldn't read too much into moves this week," a UK fund manager said.
This week metals consumers, producers, analysts and traders are gathering in London for LME dinner week.
That could leave some trading desks thinly staffed and the market vulnerable to a repeat of last year's 16 percent price collapse, dealers said.
They said option declaration on Wednesday was also contributing to the uncertain and volatile conditions.
"Until we get options declarations out of the way (copper) will range between $3,800 and $4,000," a second trader said.
In copper, 2,979 calls are open at $4,200, and 2,782 at $3,800.
Zinc set a fresh 8-1/4-year peak of $1,566 a tonne in electronic trade on Monday but gave up those gains to end the day at $1,546, up $3 from Friday's close.
"Zinc needs to close above $1,550. It looks a little toppy but forward buying is supporting prices," the first trader said.
Zinc prices have risen from $1,173 in July on fund buying, anticipating tight supply in 2006 and uncertainty about 250,000 tonnes of metal stored in New Orleans when Hurricane Katrina struck.
On Monday the LME said it would lift the suspension on 1,639 New Orleans zinc warrants, which represent 40,975 tonnes of metal, from the start of business on Tuesday.
Aluminium was up $34 at $1,984 and analysts said prices could break $2,000 again.
Lead was down $1 at $963 and nickel was unchanged at $12,000/20.
Tin drifted down $20 at $6,280.
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