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Comex copper falters under selling pressure

NEW YORK: Comex copper futures erased early gains on Friday on lackluster selling interest. The market traded steadily higher on trade interest and switch activity, according to traders.

"Technically, this is just a little correction in the bigger picture," said one broker. "The funds did some buying but those who had gotten long on the breakout yesterday did some liquidating," he added.

Some heavy volumes traded around the 84.50 and 83.80 cent levels. "Failure at 85.00 is what really sealed its fate in the short-term and people just started unloading," said the broker.

Comex March ended 0.95 cent lower at 83.50 cents a lb after trading 83.35 to 85.20 cents. Spot February dropped 0.90 to 83.00 cents, with May down 0.90 at 84.50 cents.

"Today, we're following nickel. Copper just doesn't have a mind of its own," said a floor trader. "The volume hasn't been that great. There have been a lot of switches trading."

In London, Asian buying was not strong enough to help keep prices up. The red metal ended off $6 at $1,858 a tonne. Dealers expect buying to taper off next week due to the Chinese lunar holiday.

LME stocks were slightly higher at 813,075 tonnes, up 575 tonnes. Stocks have steadily risen on a daily basis with most traders saying the material was accounted for as off warrant metal now being placed on warrant.

The one brief anomaly came from the 17,350-tonne jump in stocks on Monday which started a steady three-day sell-off before prices started to bounce back.

Technically, nearby resistance levels have been pegged at 88.50 cents up to the 89.00 cent level for March delivery. Support nearby is at 84.30, followed by 83.80 cents with strong support at 82.75/80.

Final estimated volumes Friday reached 15,000 contracts, compared with offical volumes Thursday of 12,242 contracts, and an official turnover Wednesday of 16,447 lots.

The nine-day relative strength index for March copper lost steam on the close to dip into oversold territory at 24 after flirting with steady neutrality at 42, and compared with 33 at the close of business Thursday.

Technical analysts usually interpret an RSI reading of 70 or higher as indicating overbought conditions and 30 or below as oversold. -Reuters