US copper futures ended on Tuesday with modest gains in a late rally as strong fundamentals gave bargain hunters a reason to overlook a rise in the dollar that pressured copper early, traders said. "The market certainly came off because of the currencies, when we fell in quite a hurry, and it wasn't surprising that it came down as much as it did," a dealer said.
"And it wasn't so surprising that it bounced back up again, because the fundamentals are still pretty strong. So people saw it as a buying opportunity, coupled with a bit of short covering," the dealer added.
The copper market reopened Tuesday after being shut Monday for the US Memorial Day holiday.
At the New York Mercantile Exchange's COMEX division, copper for July delivery closed 0.55 cent higher at $1.4565 a lb.
Spot June copper jumped 1.90 cents to $1.5050 a lb. by the end. Term contacts closed with 0.20 to 0.95 cent gains.
Copper sank at the open on Tuesday, following London prices down, after a surge in the dollar undermined the red metal in the overnight market, traders said. Traders said the speed and magnitude of copper's late gains was a surprise, however.
"But that's the nature of the beast. The market was thin, stocks are still going down, perhaps not as rapidly, but they are still at historically low levels," a trader said.
By the close, COMEX estimated that 17,000 contracts traded, compared with 11,529 lots on Friday.
July copper was able to take back some lost ground after mixed readings on the US economy were released.
US consumers were surprisingly upbeat in May. The Conference Board's index rose to 102.2 from 97.5 in April, instead of dipping to 96.5 as economists had forecast.
By contrast, the Chicago Purchasing Management Index slid to 54.1 in May from 65.5 in April. Analysts projected a smaller loss to 62.0 for May.
One analyst called the Chicago PMI "absolutely disastrous," noting all the components in the report got hit, which indicated demand for copper might slow.