US copper futures settled a touch higher in choppy action on Monday, with a public holiday in London creating illiquid trading conditions and prompting investors to focus on the charts, traders said. The London Metal Exchange closed for a public holiday. Trading will resume on Tuesday.
Copper for September delivery ended the day up 0.90 cent at $3.4815 a lb on the New York Mercantile Exchange's COMEX division, after dealing in a range between $3.4405 and $3.5125. Larry Young, senior trader at Infinity Futures Inc in Chicago, cited mostly technical business due to the thinned-out holiday volumes.
"We had a sell signal at $3.4370 that we hit, but have moved nicely away from," he said. "With the lower volumes today, people are really just trading off of the technicals." By 1 pm EDT (1700 GMT), COMEX estimated futures volumes at 14,130 lots. Final volumes on Friday totalled 18,237 lots.
Open interest in the copper futures market slipped 2,081 lots to 90,012 open contracts as of August 22. Infinity Futures Inc's Young saw next resistance in the September contract at $3.5510. Copper, an industrial metal used primarily in home construction, garnered additional support from a more stable tone in the US housing sector.
The National Association of Realtors reported that sales of previously owned US homes rose 3.1 percent in July to a 5 million-unit annual rate, topping analyst expectations of a pace of 4.90 million. "Right now the sign is encouraging, not that it's over, but you're starting to see a bottom," said David Wyss, chief economist for Standard & Poor's in New York.
"Prices have come down more than we have expected, but sales and starts have actually held up better. That may be a sign of realism out there, that people have accepted the fact they can't get as much for the house as they thought they could."
Despite the metal's slightly stronger tone on Monday, much of its upside potential still remained heavily dependent on top metals consumer China. London Metal Exchange copper warehouse stocks stood at their highest levels in six months at 163,800 tonnes. COMEX copper stocks were flat at 5,390 short tons on Friday.
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