Industrial metal futures gained on Friday, with nickel rising 7.8 percent at one point, while the market took note of speeches by Federal Reserve Chairman Ben Bernanke and US President George W. Bush. Benchmark London Metal Exchange (LME) copper futures closed at $7,460 per tonne, up $60 from Thursday's last quote.
Nickel rose to a one-month high of $30,500 on renewed fund interest before ending at $29,800, up $1,500. The Federal Reserve is set to act as needed to limit the impact of the financial turmoil on the economy, but will not bail out investors who made poor decisions, Fed Chairman Ben Bernanke said on Friday.
"The Fed is prepared to respond to the recent financial turbulence by cutting interest rates, but if and only if there are signs that tightening credit conditions and a general loss of confidence is spilling across to impact the real economy," economist John Kemp at Sempra Metals said. That impact would not be apparent for at least a month or two given the lags in data, he added.
US stocks cut gains after Bush unveiled plans to help subprime borrowers but said it was not the government's job to bail out speculators in connection with losses in the home mortgage and credit market sectors.
Metals have tracked stock markets recently, after being heavily sold to cover losses in other assets in the wake of the collapse in the US high risk home loans market, and consequent fear about a global credit squeeze.
Copper, often seen as a gauge of the real economy, traded down to $7,210 on Wednesday, but even at that level was still well above this years low of $5,250 recorded in February.
"We have been very busy as it is the end of the month and the US market is closed on Monday," an LME trader said, referring to the Labour Day holiday. On the fundamental side, support continues to come from threatened industrial action at Southern Copper's operations in Peru and a month-long strike at Grupo Mexico's Cananea mine in Mexico.
Copper prices were seen remaining above $7,000 in the fourth quarter, the metal consultancy CRU said in a report. "The copper market will record a modest deficit of around 100,000 tonnes for calendar 2007," CRU said. CRU said the ongoing fragility of supply would be capable of driving prices higher into the first quarter 2008.
Nickel has been the best performer over the past two weeks, despite concerns over global economic growth, analyst Daniel Hynes at Merrill Lynch said in an email. "But we believe the rebound off its year low of $25,500/t two weeks ago is premature," Hynes said. Tin was up $300 at $15,450, supported by news that Indonesian exporters are considering limiting exports. Lead fell $75 at $3,110, while zinc gained $70 at $3,110 and aluminium rose $14 to $2,544.
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