US copper hit four-month highs for a third straight day on Friday, supported by strong US employment data, but pared gains to end with only a small rise as Wall Street stocks came off highs when data showed the US non-manufacturing sector grew at a slower pace in August. Copper for December delivery finished up 0.45 cents, or 0.13 percent, at $3.50 per lb on the COMEX metals division of the New York Mercantile Exchange.
December copper soared to its session high at $3.5345 per lb, the highest in four months. It rose to a multi-month peak after improved US non-farm payrolls data, but later fell to a session low at $3.4710 per lb. COMEX estimated final copper futures volume at 18,834 lots, versus Wednesday's estimated volume of 27,564 lots.
Open interest rose by 982 lots to 133,302 contracts as of September 2. US non-farm payrolls fell for a third straight month in August, but by much less than analysts expected, easing pressure on the Federal Reserve to prop up economic growth, and boosting stock market and copper prices. Non-farm payrolls declined by 54,000, almost half of the 100,000 job losses analysts had expected, an encouraging sign that the economy may not be headed for a double-dip recession.
The rally was short lived, however, as the Institute for Supply Management's index measuring US non-manufacturing sector grew in August, but at a slower rate than expected, pulling copper prices off highs. "The Dow Jones industrial average was very strong today at the heels of robust employment data. This created a feeling that perhaps we're starting to see the beginning of some sustained economic recovery," said Scott Meyers, senior trading analyst at Pioneer Futures in New York.
The stock market's rally following the employment data was also tempered by the ISM report. London Metal Exchange (LME) copper warehouse stocks extended falls, slipping 1,800 tonnes to 397,675 tonnes. Benchmark copper for three-months delivery on the London Metal Exchange ended at $7,640 a tonne compared with a close of $7,635 a tonne on Thursday. It touched $7,750 earlier, its highest since late April.
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