Shanghai Futures Exchange copper closed up 2.1 percent on Monday, having tracked London copper in Friday's overnight session, but prices stayed near two-week highs as better than expected Chinese economic data soothed demand concerns. Given the high concentration of short holders in metals markets, prices were susceptible to a covering-fuelled rally as traders cut risk ahead of the Fed rate decision this week, said analyst Dan Morgan at UBS in Sydney.
"Also with holidays coming up in some parts of the world, do you want to have risk over the holidays? I think we could see some short covering into Fed decision or into end of year," he said. "But that is window dressing on what is a still bearish fundamental outlook."
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