Red metal gathers strength

Weak dollar boosts prices

Copper prices at Comex ended substantially higher on Wednesday, 12 October 2011. Red metal prices rose sharply higher following a weak dollar and also as copper traders reported continued buying in copper from China and other Asian markets.

Copper for December delivery ended higher by 10 cents (3.1%) at $3.4 a pound at Comex on Wednesday. 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.

Red metal prices for three-month-delivery at LME rose $210 (2.9%) to $7,510 a metric ton on Wednesday.

US stocks pared early weakness and were trading higher today. Its strength came largely in response to improved confidence in Europe, where officials have recently made a stronger commitment to shore up the region's financial system and even recapitalize its banks. That has helped reduce the perception of risk related to the European portfolios owned by diversified banks and financial services firms. In addition, Slovakia's political parties reached an agreement that will allow the nation's parliament to approve enhancements to the Europe's bailout fund.

In the currency market on Wednesday, the dollar index, which measures the strength of the dollar against a basket of six other currencies, ended lower by 0.55%.

Among other traded metals at LME on Wednesday, lead in London rose 3.2% to $2,035 a ton and nickel rose 1.8% to $19,200 a ton. Aluminum closed 0.9% higher at $2,259 a ton, and zinc closed higher by 3.2% at $1,970 a ton.

At the MCX, copper prices for November delivery ended higher by Rs 8.3 (2.3%) at Rs 368.75/Kg. Prices rose to a high of Rs 371/Kg and fell to a low of Rs 361.9/Kg.