METALS-Copper steady on euro, U.S. jobs data in focus

Fri Oct 5, 2012 3:47am EDT

Related Topics

* LME copper set for gain this week, after two straight
weekly losses
    * ShFE closed Friday for holidays, U.S. markets shut Monday
    * Nickel to outperform as chart watchers buy in -RBC
    * Coming Up: Germany Industrial orders for August; 1000 GMT

 (Adds detail, weekly gain, updates prices)
    By Melanie Burton
    SINGAPORE, Oct 5 (Reuters) - Copper steadied on Friday,
supported by a firmer euro after the European Central Bank said
it was ready to buy bonds of troubled countries in the region,
although volumes were low with top consumer China on a week-long
holiday. 
    Focus is now shifting to a key U.S. jobs report later in the
day that may show a recovery in the world's top economy is
taking hold.
    "Fourth quarter the big focus is just whether the central
bank action flows through to real demand," said Ivan Szpakowski,
a Credit Suisse analyst in Singapore.
    "It looks like things in the U.S. are improving somewhat ...
and that the EU has at least stabilised. But in China, there
doesn't seem to be any real improvement at all."
    U.S. job growth likely improved only slightly in September
as businesses remained cautious out of fear a sharp tightening
of the government's budget could deliver a big blow to the
economic recovery early next year. 
    But a sign the job market is still on the mend came on
Thursday as the number of Americans filing new claims for
unemployment benefits rose only slightly last week after a big
drop the week before. 
    Three-month copper on the London Metal Exchange 
traded at $8,296.75 a tonne by 0710 GMT, cutting small gains
from earlier but little changed from the previous session. The
prices were on track for a more than 1 percent gain this week,
snapping two straight weekly losses.
    Copper hit a 4-1/2 month high on Sept. 19 at $8,422 a tonne
following accommodative policy moves by the ECB and the U.S.
Federal Reserve, but gains have since been capped by worries
about slowing growth in China.
    The Shanghai Futures Exchange remains closed for a week of
holidays. 
    Adding to support for metals, the euro stayed near a
two-week high versus the dollar, buoyed by ECB's announcement on
bond buying. A weaker dollar makes commodities priced in the
greenback less expensive for holders of other currencies. 
    ECB President Mario Draghi said on Thursday that everything
was in place for the bank to buy the bonds of troubled euro zone
countries such as Spain and that conditions linked to it need
not be punitive. 
    But taking some shine off global growth prospects, a media
report said the International Monetary Fund will lower its
forecasts for global economic growth to 3.3 percent this year
and 3.6 percent in 2013 from earlier forecasts of 3.4 percent
and 3.9 percent. 
    China's appetite for metals may be muted when it returns on
Monday given prices are $100 higher this week, a trader in
Singapore said, with a U.S. holiday on Monday also likely to
keep trading quiet.
    Direction will hinge on whether the September jobs report
meets expectations, he added.
    
    NICKEL'S TECHNICAL OUTLOOK
    Nickel is set to outperform during the fourth quarter, RBC
Capital said in a note, with an improvement in the metal's chart
picture attracting technical buyers as the winter drilling
season, which fuels demand for stainless steel pipes, nears.
    "Technical buying has featured heavily in recent weeks after
the 200-day moving average was broken to the upside; we are
targeting $20,000 as the first point of resistance for Q4
followed by $22,000," it said. 
    LME nickel traded last at $18,631 a tonne, recovering 22
percent from 3-year lows of $15,236 reached on Aug. 2 to trade
down 0.4 percent on the year. 
    "With longer term technical players looking for dips to
cover legacy shorts and short/medium term players getting long,
we think nickel will continue to perform well in the near
future," it added
   PRICES
                                                                       
  Base metals prices at 0710 GMT
  Metal              Last       Change   Pct Move YTD pct chg
  LME Cu            8296.75     -8.25     -0.10      9.17
  SHFE CU FUT JAN3    --         --        --        --
  HG COPPER DEC2     378.25     -0.35     -0.09     10.08
  LME Alum          2114.00     +2.0       0.0      4.65
  SHFE AL FUT JAN3    --         --        --        --
  LME Zinc          2065.25      0.25     +0.01     11.94
  SHFE ZN FUT JAN3    --         --        --        --
  LME Nickel       18631.00    -44.00     -0.24     -0.42
  LME Lead          2271.25    -19.25     -0.84     11.61
  SHFE PB FUT         --         --        --        --
  LME Tin          22500.00      0.00     +0.00     17.19
  LME/Shanghai arb^    --
 
   Shanghai and COMEX contracts show most active months
 
 (Editing by Joseph Radford and Himani Sarkar)
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