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Comex May copper ends higher in low-key day

NEW YORK: Comex copper futures closed firmer on Thursday as futures firms and locals provided light support after fund business again failed to materialise, dealers said.

"Commission house buying and local short covering were featured in this afternoon's trade," said a Comex floor source.

Copper rallied from being pressured early in the day as prices faltered on the London Metal Exchange (LME), where dealers reported selling at levels around 30- and 100-day moving averages.

Active May closed up 0.10 cent to 81.80 cents a lb, ranging just 81.00 to 81.85 cents, while spot March gained 0.20 to 81.10 cents and others increased 0.05 to 0.15 cent.

"The market has been correcting a little bit from overbought," according to AG Edwards commodity commentator James Quinn. "It looks like we spent the better part of the day on the defensive, (mostly) on long liquidation."

Floor sources said more declines on the LME were expected after warehouse stocks fell 5,650 metric tonnes to 790,150 tonnes on Thursday. Comex stocks rose 108 short tons to 96,416 tons in Wednesday's report.

The absence of fund business plagued copper trading in both the Comex and LME exchanges, where funds are generally seen as the largest stakeholders.

However, copper's open interest was rising, traders said, amid increased speculator and local positions.

As of March 22, open interest rose 1,075 contracts to 69,324 lots.

One Comex trader said he expected funds to acquire longs at a settlement above 83 cents a lb in May.

Traders pegged near-term support in May copper at 81 cents a lb and resistance at 82.50 to 83 cents.

In LME trade, three-months copper finished at $1,782 a tonne after the late kerb, off $12 from the previous close as dealers saw most funds sidelined, short the market and hoping for cheaper prices.

The nine-day relative strength index (RSI) for May copper rose to 62, up from at 61 at Wednesday's close.

Technical analysts usually interpret an RSI reading at 70 or higher as overbought conditions and 30 or below as oversold.

Final estimated volumes for Comex copper reached 13,000 contracts, against Wednesday's official total of 13,224 lots.

Comex is a division of the New York Mercantile Exchange.-Reuters