Red metal overcomes initial weakness

Mixed economic data and weak dollar take prices higher

Red metal price overcame initial weakness and ended higher going into close at Comex on Friday, 03 June 2011. Prices remained volatile due to mixed set of economic data and weak dollar.

Copper for July delivery ended higher by 5 cents (1.2%) to end at $4.13 a pound at Comex on Friday. Earlier during the day, prices dropped following a weak job report from the Labor Department. For the week, the red metal lost 1.4%. Copper ended flat for the month of May.



On Friday, three-month-delivery copper on the London Metal Exchange ended higher by $211 (2.4%) at $9,131 a metric ton.

Copper prices ended the first quarter down 3.1%. For the year till date, copper prices are almost unchanged.

In the currency market on Friday, the dollar index, which weighs the strength of the dollar against a basket of six other currencies, dropped by 0.5%.

The Labor Department in US reported on Friday, 03 June 2011 that nonfarm payrolls during May in US rose by a seasonally adjusted 54,000. This was the smallest gain since September and less than 150,000 jobs expected. The official unemployment rate increased to 9.1% in May from 9.0% in April. This is the highest unemployment rate since December. Market had expected a slight drop in the jobless rate to 8.9%.

Economic data on Friday at Wall Street from The Institute for Supply Management showed that its services index rose to 54.6% last month from 52.8% in April. Readings over 50% indicate more firms are expanding than contracting. Market had expected the services index to rise to 54.0%.

Among other traded metals at LME on Friday, lead in London advanced 1.4% to end at $2,449 a ton and nickel gained 1.4% to $22,900 a ton. Aluminum closed 0.8% higher at $2,638 a ton, and zinc closed 1.8% higher at $2,268 a ton.