In a dramatic turnaround, Comex copper reversed its steep losses in the last minutes on Tuesday to close with moderate gains, which some traders attributed to selling on global security worries that was met with late short-cover buying on dips, traders said.
"You had a three-cent drop, based on the US stock market weakness, and then they ate it right back up. They came in buying again," said one New York dealer.
Traders said locals and speculators who missed out on Monday's heavy selling continued to unload on Tuesday. As soon as sellers ran out of steam, players with short positions scrambled to cover. "It seems to be the same old story.
Any dip that is being generated by profit taking is met with buying. It's the same old song and dance.
They're buying dips," said one trader. Benchmark may copper ended 0.60 cent higher at $1.3590 per lb., after sliding as low as $1.3165 and rising as high as $1.3600 a lb. at the end of the session.
Spot March was up 0.55 cent by the end at $1.3605 a lb. The rest of the board rose 0.60 to 0.70 cent after substantial declines for most of the day.
Comex estimated final copper volume at 13,000 lots on Tuesday, similar to the 13,221 turnover on Monday.
Open interest fell by 2,414 contracts to 74,717 on Monday.
Copper sellers were keying off stock market weakness, with both markets undermined by security worries, traders said.