Copper futures ended on Friday with moderate gains after light selling, mainly by locals, was followed by speculative and fund buying, as participants tried to figure out which way prices would go after a steep rise to 9-year highs in the previous session, traders said.
"I think people were left with two minds about what to do. After we've had such a strong run they thought we may have a severe correction, so a lot of people got short in anticipation of more liquidation. That didn't materialise and they waited until the last minute to short cover, when it went back up to the highs again," said one New York dealer.
Benchmark December copper finished with 0.80 cent gains at the day's high of $1.4040 a lb. The low was $1.3850.
On Thursday, copper ran up to $1.4080 per lb., a high dating back to July 1995 on a continuation chart.
Spot October futures also rose 0.80 cent to close at $1.4080 per lb. The rest settled 0.30 to 1.00 cent higher.
The COMEX division of the New York Mercantile Exchange estimated final copper volume at 10,000 lots on Friday, compared with Thursday's light volume of 12,653 contracts.
Open interest on Thursday rose by 1,924 lots to 96,681.
A number of fundamental factors underpinned prices, but some players worried the steep rise to Thursday's 9-year highs may have saturated the market with long positions.
One trader pointed out that the beginning of a quarter often brings new money into the market, but he cautioned a sudden bout of selling could cause some long positions to be unwound and short-term speculators to bail out in a hurry.
On Friday, however, one trader said: "It was busy in spurts and then real quiet. This morning we had some buying going on the books, that took copper up to the day's highs. When it ran out of steam everyone was quick to sell and it fell sharply."
Traders said Monday may see a similar seesaw session.
"It's come this far, but now it's starting to struggle at these high numbers, but it probably needs to take a breather before we launch up to $1.50 (a lb.)," said one dealer.
Economic numbers coming out next week could be the wild card and change the game plan, he added.
On Monday, August factory orders come out and the September employment figures are due on Friday.
On Friday, copper slipped at the midsession on a decline in September manufacturing shown by the Institute for Supply Management measure of 58.5 from 59 in August and 62 in July.
A sharp drop in the new orders gauge, along with a slide in supplier deliveries, export orders and prices all suggested easing demand.
US construction spending hit a record high in August for both total and private construction. Although the pace of the increase slowed to a 0.8 percent increase from a robust 1.1 percent rise in July, the August result doubled forecasts.
It was also the seventh straight record high as low mortgage rates and a recovering economy fuelled both residential and non-residential building.