US copper futures settled at a 1-1/2-week high Friday as mounting losses in the dollar following disappointing May employment data boosted the appeal of commodities as a hedge against inflation. Copper for July delivery ended up 8.00 cents at $3.6230 a lb on the New York Mercantile Exchange's COMEX division, its highest closing level since May 28.
The session range spanned from $3.5695 to $3.67. By 1 pm EDT (1700 GMT), copper volume estimated at 25,195 lots. The final Thursday tally totalled 15,419 lots. Open interest declined 353 lots to 97,264 contracts as of June 5. Copper derived technical strength from Thursday's test and hold of key support at around the $3.50 level - Larry Young, senior trader at Infinity Futures Inc in Chicago.
Next area of resistance seen at $3.75 - Young. Copper up on the coattails of the sharp swings higher in the precious metals and energy complexes - trader. The dollar fell across the board after US economic data showed the economy lost jobs for the fifth straight month and the unemployment rate shot up to its highest level in more than 3-1/2 years.
It looks as though the commodities are once again seeing inflation as a positive for metal prices as they offer investors some hedge against inflation - William Adams, metals analyst with BaseMetals.com. In afternoon trading in New York, the euro was trading at around $1.5755 versus the dollar, up nearly 1.1 percent on the day.
Earlier in the week, comments from Federal Reserve Chairman Ben Bernanke about an ailing dollar and its impact on inflation led to a turnaround in the US currency and sparked a broad-based sell-off in commodities. A weaker American currency tends to make dollar-denominated assets like copper cheaper for overseas investors.
London Metal Exchange (LME) copper stocks dropped by 950 tonnes to 122,550 on Friday, after rising some 10 percent since the start of May. Copper inventories in warehouses monitored by the Shanghai Futures Exchange fell 13 percent to 38,829 tonnes in the week ended Thursday.
COMEX copper stocks were flat at 11,051 short tons on Thursday. On the supply side, BHP Billiton said operations at its smallest copper mine in Chile, Cerro Colorado, had been hit by a truckers' strike, but its larger mines, were so far unaffected. Zambia's Copperbelt Energy was forced to cut back supply after disruptions in electricity imports. Worker tensions seen in Mexico boost chances of strike, while In Peru, the country's largest federation of mining unions planned a nation-wide strike starting on June 16.
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