METALS-Copper retreats after touching 3-1/2 month peak

Thu Jan 31, 2013 1:02pm EST

* Copper gains 3 pct gain in January
    * Investors pull back, wait for signs of metals demand
    * Mixed U.S. personal income/jobless data
    * Coming up: China official PMI seen up; Friday 0100 GMT


    By Susan Thomas and Eric Onstad
    LONDON, Jan 31 (Reuters) - Copper dipped on Thursday, retreating from a
3-1/2 month peak as investors grew wary about the lack of underlying metals
demand amid economic recovery in top metals consumer China and in the United
States.  
    Three-month copper on the London Metal Exchange closed 0.7 percent
weaker at $8,165 a tonne after three days of gains and after touching an
intraday peak of $8,291.25, its highest since early October.
    "It was too much too soon. CTA buying pushed it all higher yesterday and
this morning, but after lunch the buying dried up and there was no one left to
support prices here," said a London metals trader. 
    Commodity Trader Advisers (CTAs) or managed future funds seek opportunities
as momentum and trends develop, but can quickly reverse their positions.
    Investors will now be closely eyeing China's purchasing manufacturing
figures and the U.S. January jobs report, both due on Friday.
    "We could see a mild retracement setting in over the balance of the week,
particularly if tomorrow's nonfarm payroll number disappoints," said analyst
Edward Meir at INTL FC Stone in New York. 
    Economists polled by Reuters expect China's official purchasing managers'
index (PMI) in January rose to 50.9 from December's 50.6 - a fourth consecutive
month of accelerating activity.          
    Investors got mixed news on Thursday about the recovering U.S. economy when
data showed U.S. personal incomes rose last month by the most in eight years, a
positive sign for consumer spending, but this was balanced by a rise in jobless
numbers. 
    LME metal prices had been locked in a range for most of the month until this
week, but a succession of upbeat economic data helped push copper to fresh highs
and achieve a gain of 3 percent in January. 
    "I think many investors believe we are currently at a macro turning point,"
said Nicholas Brooks, head of research and product strategy at ETF Securities in
London, which has seen record inflows for its base metals funds in recent weeks.
           
    Investors were also emboldened after U.S. Federal Reserve on Wednesday left
in place its monthly $85 billion bond-buying stimulus plan and the Bank of Japan
signalled that it would unleash more stimulus if needed. 
    But weak retail sales in Germany, Europe's largest economy, and a big
quarterly loss at its biggest bank, Deutsche Bank, tempered investors'
enthusiasm. European shares fell for the second day. 
    Also, traders say momentum on metals markets may be hard to sustain before
mid-February, with Lunar New Year looming in China, where physical metals demand
has been weak amid high inventories.
    In other metals, nickel also touched a 3-1/2 month high and then
retreated, dipping 0.1 percent by the close to $18,350 a tonne. 
    Tin finished 0.6 percent weaker at $24,750 per tonne, lead 
shed 0.3 percent to $2,431 by the close and aluminium ended down 0.7
percent at $2,090.
    Zinc did not trade at the close and was bid at $2,145 a tonne, down
0.5 percent from Wednesday's close. 
    
 Metal Prices at 1800 GMT
 Comex copper in cents/lb, LME prices in $/T and SHFE prices in yuan/T
  Metal            Last      Change  Pct Move   End 2012   Ytd Pct
                                                              move
  COMEX Cu       373.00       -2.00     -0.53     365.25      2.12
  LME Alum      2095.25       -8.75     -0.42    2073.00      1.07
  LME Cu        8193.50      -32.50     -0.40    7931.00      3.31
  LME Lead      2434.00       29.00     +1.21    2330.00      4.46
  LME Nickel   18390.00       15.00     +0.08   17060.00      7.80
  LME Tin      24730.00       80.00     +0.32   23400.00      5.68
  LME Zinc      2143.00       48.00     +2.29    2080.00      3.03
  SHFE Alu     15250.00       50.00     +0.33   15435.00     -1.20
  SHFE Cu*     59450.00      440.00     +0.75   57690.00      3.05
  SHFE Zin     16015.00      235.00     +1.49   15625.00      2.50
 ** Benchmark month for COMEX copper
 * 3rd contract month for SHFE AL, CU and ZN
 SHFE ZN began trading on 26/3/07
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