Copper futures in New York closed near their session peaks on Wednesday, extending the prior session's 4.7 percent price spike, as technical buying boosted prices to within the May highs, sources said.
"The funds are stepping back and looking at this, not sure of what the market will do up here will it go up another 20 cents and test the highs, or will it come off again?" said one dealer on the floor of the exchange.
"So until these funds get some kind of clear opinion of this thing, I guess we're going to stay right around where we are, but we need them back in here to get the open interest up," he added.
Copper for December delivery advanced 5.50 cents at the close to $3.6795 a lb on the New York Mercantile Exchange's Comex division, just off the upper end of its $3.60-$3.6850 trading band.
One floor dealer noted some light buy-stop orders were touched off between $3.64 and $3.68. "They were not big stops, but they kind of scaled up and triggered each other off," he said. Traders pegged first support at the $3.60 level, with initial resistance at the August 10 high near $3.70. December copper hit a contract high at $3.80 a lb on May 11. Spot September rose 5.10 cents to $3.7020 a lb. Floor dealer estimated Comex final copper at 10,000 lots, compared with Tuesday's official count at 12,104 lots.
The copper market received an additional boost after the Institute for Supply Management said the pace of growth in the US service sector rose unexpectedly in August. The ISM's monthly non-manufacturing index, which measures the services sector of the economy, rose to 57.0 in August from 54.8 in July and above market expectations of 55.