NEW YORK/LONDON Copper rose on Friday, posting its first weekly gain in the past seven, boosted by assurances that the world's central banks stand ready to stabilize markets if Greek election results this weekend cause any financial upheaval.
Copper ignored another batch of soft economic numbers out of the United States, which showed consumer sentiment drop to a six-month low in early June, and instead rose in tandem with other risk assets like the euro and U.S. equities on the prospects of a coordinated global response to Greece's election outcome.<USD/> .N
"The coordinated bank events are absolutely what is helping to lift prices. You'll also see that if the Greeks play ball, metals will also find some support," analyst Nic Brown of Natixis said.
"(But) if you look at what happened with the bailout for Spanish banks a few weeks ago, you get a wave of euphoria on a Monday morning that fizzles out by Friday. All in all, you probably wouldn't want to be short going into this weekend."
London Metal Exchange (LME) three-month copper rose $90.50 to finish at $7,510.50 a tonne.
For the week, the red metal is up nearly 3 percent.
In New York, the COMEX July contract firmed 2.90 cents to settle at $3.3835 per lb, after dealing between $3.3575 and $3.4090.
COMEX copper volumes slowed ahead of the Greek election results with 59,000 lots traded in late New York business -- more than 20 percent below the 30-day norm, according to preliminary Thomson Reuters data.
Bucking the firmer trend across the base metals complex Friday was aluminum, which fell to its cheapest level in nearly two years on the increasingly bearish prospects of a glut in global supply and softer demand.
Central banks from Tokyo to London prepared for any turmoil from Greece's election on Sunday, with the European Central Bank hinting at an interest rate cut and Britain set to open its coffers.
Officials from the G20 told Reuters on Thursday that the top central banks stood ready to stabilize markets by providing liquidity if the election result causes financial upheaval.
"The G20 came out and said they'll be ready with their fire hose of liquidity if there's a problem ... copper is one of those assets that instantly benefits from this," said Sterling Smith, vice-president of commodity research at Citibank's Institutional Client Group in Chicago.
U.S. data, while gloomy, set the stage for another possible round of easing and helped underpin copper prices. While consumer sentiment fell, manufacturing output contracted in May for the second time in three months -- latest signs that the American economy could be cooling.
In industry news, the Hong Kong stock exchange agreed to pay 1.4 billion pounds ($2.2 billion) to buy the LME in a deal that gives Asia's largest bourse a much needed entry into a commodities trading platform and brings LME members closer to China, the world's biggest metals buyer.
In China, efforts may be under way to roll out more policies to stimulate growth, including more interest rate cuts, although a costly stimulus budget may not be in the cards.
China's spot copper demand has improved from previous months but remains at low levels, traders said.
The rally in copper prices appears to have blunted China demand, Standard Bank said.
"After trading at a premium to the SHFE front month for much of the past couple of weeks, the rally in prices has seen physical copper in China trade at a discount to the spot SHFE contract," it said in a note.
Europe's biggest copper producer, Aurubis (NAFG.DE), said softer growth rates in China were to be expected and the country's demand for raw materials like copper is unlikely to be as strong as in previous years.
Copper has fallen by more than 14 percent from its 2012 peak of $8,765 touched in February.
In other metals, aluminum ended down $21 at $1,933 a tonne, having earlier hit its lowest since July 2010 at $1,927.50.
China's top aluminum producing province of Henan may subsidize electricity used by loss-making smelters in a bid to spur local growth, a tactic other provinces could adopt, helping to keep production strong and limiting imports.
(Additional reporting by Melanie Burton; editing by James Jukwey and Marguerita Choy)