Copper Futures Extend Rally to Four-Month High on U.S. Housing, Jobs Data

Copper rose, extending a rally to a four-month high, as U.S. housing and jobs data signaled an improving economy, easing concern that demand for the metal will ebb.

Pending U.S. home sales unexpectedly increased, snapping two months of declines, an industry report showed. Initial jobless claims fell by 6,000 to 472,000 in the week ended Aug. 28, the government said. The U.S. is the world’s second-largest metal user.

“The market is up a little on temporary, renewed economic optimism,” said Matthew Zeman, a trader at LaSalle Futures Group in Chicago.

Copper futures for December delivery climbed 1.8 cents, or 0.5 percent, to close at $3.4955 a pound at 1:17 p.m. on the Comex in New York. Earlier, the metal reached $3.5045, the highest level for a most-active contract since April 27.

“Prices will trade sideways between $3 and $3.60 in the foreseeable future, until the economic picture becomes clear,” Zeman said.

Yesterday, copper jumped 3.2 percent, the most since May 21, as manufacturing in the U.S. and China, the biggest buyer, topped forecasts. The International Monetary Fund raised its economic-growth estimate for South Korea to 6.1 percent from 5.75 percent, damping concern that a U.S. slowdown will hurt Asia.

“With particular strength in other developing economies, the outlook for industrial growth remains good,” said Nic Brown, an analyst at Natixis Commodity Markets Ltd. in London. “Our outlook is for a modest slowdown in China, while the U.S. should escape” another recession, he said.

On the London Metal Exchange, copper for delivery in three months added $29, or 0.4 percent, to $7,635 a metric ton.

Zinc, aluminum, lead and nickel also climbed on the LME. Tin fell.

To contact the reporters on the story: Yi Tian in New York at Ytian8@bloomberg.net; Anna Stablum in London at astablum@bloomberg.net.

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