Farallon Resources Ltd. (fka FRLIF)

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Zinc climbs, Comex Copper Inches Higher After Economic Data

Jul 08, 2010 (Dow Jones Commodities News via Comtex) -- By Allen Sykora

Of DOW JONES NEWSWIRES

Improving global economic data helped copper move tepidly higher early Thursday, but with the upside limited by worries about just how strong any recovery might be.

Around 9:09 a.m. EDT (1309 GMT), copper for September delivery was 2.45 cents, or 0.8%, higher at $3.0395 per pound on the Comex division of the New York Mercantile Exchange.

William Adams, analyst with Fastmarkets.com, cited strength in equities in the U.S. Wednesday and Asian and stock bourses overnight as a factor helping sentiment modestly. Copper traders often look toward moves in equities as a proxy for the economy and thus potential copper demand.

"Risk appetite has picked up a bit, and some bargain hunting has come into the metals as well," he said.

A New York trader said modest support came from the largest drop in first-time U.S. jobless claims since mid-April, although the decline was not large enough to trigger a more substantial rally in copper. Weekly claims fell 21,000 to 454,000, when expectations had been for a 12,000 decline.

This comes on the heels of favorable overseas data. German May industrial production rose 2.6%, well above the consensus forecast of 1%. Australian employment rose 45,900 jobs last month, beating the forecast for a 15,000 increase. Meanwhile, the International Monetary Fund raised its 2010 global growth forecast to 4.6% from the previous estimate of 4.2%.

Adams suggested the bounce in copper lately may not be keeping pace with equities, however.

"The overall economic picture hasn't been that strong," he said. "So that's holding it back a bit."

Last week, there was a string of soft economic reports in the U.S. and China that dented sentiment, before improvement in global data this week.

The New York trader said copper may take its next cue from upcoming corporate earnings reports. If they should be collectively stronger than forecast, this would bode well for equities and economic prospects, which in turn would improve prospects for copper demand.

-By Allen Sykora, Dow Jones Newswires; 541-318-8765; [e-mail]

http://news.tradingcharts.com/futures/2/1/142154312.html