Base metals end strongly higher

Gains get capped by a strong dollar

Copper prices ended higher on Friday, 03 February 2012 at Comex. Copper prices rose to a one-week high on Friday after strong labour market and services sector data from the US reinforced confidence about the pace of recovery in the economy. Gains were capped by a strong dollar.

Copper for March delivery ended higher by 12 cents (3.2%) at $3.9 a pound at Comex on Friday. Prices closed 0.5% higher for the week.

Red metal prices for three-month-delivery at LME rose $225 (2.7%) to $8,570 a metric ton on Friday. Prices rose 10% for the month of January.



In the currency market on Friday, the Dollar Index, which weighs the strength of dollar against basket of six other currencies rose by almost 0.4%.

Among economic data expected for the day, a tepid tone to premarket trade turned decidedly positive on Friday, in response to news that nonfarm payrolls jumped in January by 243,000 and that private payrolls climbed by 257,000. Market had expected, on average, respective increases of 155,000 and 168,000. Moreover, the headline unemployment rate fell to 8.3% from 8.5%, which is where it had been widely expected to remain.

Buying interest among equities was further bolstered by the latest ISM Service Index. It improved to 56.8 in January from 52.6 in the prior month. Market had expected a more modest improvement to 53.1.

For the year 2011, copper shed 23% following a 30% increase in 2010 and a 140% jump in 2009, boosted by surging demand from China's manufacturers. China accounts for 40% of the world's refined copper consumption.

Among other traded metals at LME on Friday, lead in London rose 2.6% at $2,220.5 a ton and nickel closed higher by 2.3% at $21,324 a ton. Aluminum closed higher by 2.6% at $2,251 a ton, and zinc closed higher by 2.5% at $2,147 a ton.