Lme Copper Unaffected By Gulf News

Theres good support, theres certainly buying beneath the market, one said.

Follow-through selling after Mondays retreat from 2-1/2 year highs and on expectations of a stocks build of 3,000 to 4,000 tonnes pushed prices to a low of $1,970 from an afternoon kerb close of $2,026.

But prices bounced, erasing all the mornings losses ahead of the 0800 GMT stocks data, which showed a 500-tonne rise. But prices failed to react to the modest stocks rise, quoted at $2,020/27 some 45 minutes after the stocks information.

Prices also showed little interest in the news that the US launched cruise missile strikes against Iraq early yesterday. Most of the action is connected with delta hedging on the options, one trader said.

 

Some of the volatility is linked to the Sept options declaration on Wed, but longer-dated options also have to be covered, dealers said. Key support was pegged at the early morning low of $1,970, which had functioned as resistance for over a month.

Chartists said resistance was seen around $2,040/45, a break of which would signal a rechallenge of Mondays highs.

The spreads, however, have been very volatile, with the cash/threes indicated yesterday morning at a $20/$30 backwardation compared to $60/$70 at midsession on Monday.

Most of the other metals showed little inclination to make substantial moves during pre-market activity. Aluminium was slightly weaker after a 3,850-tonne stocks rise, having traded at $1,503 per tonne, $7 down from Monday afternoon.

Analysts said the market was trying to gain a firm foothold above $1,500 before making serious upside challenges. Resistance was pegged around $1,515/20 with support at $1,470.

On the upside a close above $1,515 is initially required, said Harry Creates, chartist for broker AMT. Nickel took little notice of a 414-tonne stocks rise, in line with expectations. It was indicated barely firmer at $7,420/30 compared to Mondays close of $7,415.

Chart-wise a poor close, but the uptrend remains intact and support is available at $7,320, said broker Brandeis in a commentary.

Lead was barely changed at $812, down $3 from Monday, after stocks fell by 150 tonnes. Tin and zinc were unchanged at $6,245/60 versus $6,250/60 and $1,034/36 versus $1,035 respectively.