20000210

COMEX copper ends down on fund liquidation

NEW YORK: COMEX copper closed down on Tuesday on fund liquidation, unable to draw sufficient enthusiasm to bounce back decisively from the day's low.

March settled down 0.70 cent at 82.00 cents a lb but above the 81.70 daily low following a 0.05 cent decline on Monday, while May fell 0.70 to 83.10 cents.

"There was continued selling from the funds that bought in heavily in January," said Sogemin Metals President Richard Hirsch. "It tried to lift at the finish line but couldn't."

Dealers reported support building up at key technical area 81.20/30 after buying came in at 81.70 cents and some predicted a swing to the upside soon.

But the afternoon buying was insufficient to drag prices higher, after major non-ferrous metals fell in London. "The small rally on the close felt like (peoples') nails at the cliff's edge," said Hirsch.

Rising interest rates in the US and abroad, coupled with concern about the long rise in equity markets, continued to unsettle markets. Gold, in particular, has benefitted, with investor interest focused on the precious metal as producers reduce forward selling in expectation of better prices ahead.

Market interest was dulled, with some dealers opting to play the more active gold market in the morning, said John Hanemann of Hanemann Trading.

In London dealings, copper edged down, ending at $1,811, down from Monday's $1,823 but still embedded in its recent range of $1,780 to $1,820.

LME warehouse stocks fell 600 tonnes on Tuesday to stand at 803,800 tonnes. COMEX stocks were up 71 short tons at 96,051.

On a chart basis, support is at 81.25, followed by 80.50 in the March contract with no significant stop loss orders in the near vicinity. Nearby resistance is pegged at 82.85 cents, followed by 83.70/90 cents. The nine-day relative strength index for March copper, a sign of the strength of the move, was steady at 33.42.-Reuters