Copper heads up

Base metal prices take a big leap on latest developments for Europe

Red metal prices at Comex ended substantially higher on Thursday, 27 October 2011. Copper prices rose, heading for a record weekly rally, after European leaders agreed to expand a bailout fund to ease the region's sovereign-debt crisis. Better than expected economic data and weak dollar also helped prices go up considerably higher.



Copper for December delivery ended higher by 19 cents (5.8%) at $3.69 a pound at Comex on Thursday. Copper has risen 15% so far this week. Last week, copper shed 5.3%. In the third quarter, copper tumbled 26%, the most since 2008. The metal touched a 14-month low of $2.994 on 3 October, 2011. Copper has slumped 30% from a record $4.6575 a pound on 15 February 2011.

Red metal prices for three-month-delivery at LME rose $397 (6.1%) to $8,145 a metric ton on Thursday.

Leaders from the European Union addressed uncertainty and frustration related to their ability to create a comprehensive plan aimed at improving financial conditions in their continent by increasing the eurozone bailout fund to about $1.4 trillion, recapitalizing banks, and agreeing to implement 50% haircut on Greece's debt obligations. The news spurred a concerted buying effort that caused US stocks to surge in broad fashion on Thursday.

In the currency market on Thursday, the Dollar Index, which weighs the strength of dollar against basket of six other currencies fell by almost 1.2%.

Latest data in US showed some pleasing GDP data this morning. An advance reading showed that the U.S. economy grew at a 2.5% clip during the third quarter. That exceeded the 2.3% growth rate that had been broadly expected to follow the 1.3% increase posted in the prior quarter. As for weekly initial jobless claims, they remained narrowly above 400,000, as had been expected.

Among other traded metals at LME on Thursday, lead in London rose 6% to $1,990 a ton and nickel rose 4.1% to $19,900 a ton. Aluminum closed higher by 1.8% at $2,256 a ton, and zinc closed higher by 4.9% at $1,920 a ton.