Farallon Resources Ltd. (fka FRLIF)

[the cork]

Zinc gains, Copper Climbs to Four-Month High on Share Rally, Bernanke, Japan Optimism

By Bloomberg News - Aug 30, 2010 2:49 AM PT

Copper climbed to a four-month high from New York to Shanghai, as the Bank of Japan expanded credit support for banks and the Federal Reserve pledged steps to spur economic growth, potentially boosting demand for commodities.

December-delivery copper in New York jumped as much as 2.2 percent to $3.46 a pound, the highest level since April 27, and traded at $3.4110 at 5:46 p.m. in Singapore. The metal in Shanghai gained as much as 2.8 percent to 59,450 yuan ($8,740) per metric ton before closing at 59,390 yuan. The London Metal Exchange is closed for a bank holiday today.

“While it may seem like good news that governments are taking steps to ensure the recovery stays in place, it’s also a sign of how fragile the economy is and the current optimism may be short-lived,” Pan Jinghua, an analyst at Citic Futures Co., said from Shanghai. “The move may also be exaggerated by light volumes with London out today.”

Federal Reserve Chairman Ben S. Bernanke said the central bank has the tools to prevent the country from slipping back into a recession. The preconditions for a pickup in growth in 2011 “appear to remain in place,” he said. The Federal Open Market Committee “is prepared to provide additional monetary accommodation through unconventional measures if it proves necessary, especially if the outlook were to deteriorate significantly,” Bernanke said.

Loan Program

In Japan, the central bank expanded a bank-loan program following an emergency policy meeting today, after the yen’s advance to a 15-year high threatened the economic recovery. Prime Minister Naoto Kan met with Bank of Japan Governor Masaaki Shirakawa to decide on the outline of his stimulus plan.

“Bernanke’s speech may serve to boost market sentiment for three to five days at most,” Zhu Haitao, an analyst at Zhongcai Futures, said by phone from Beijing. “The economic conditions, as well as supply and demand, don’t support an upward trend.”

U.S. gross domestic product expanded at a 1.6 percent annual rate from April through June, the Commerce Department said Aug. 27, lower than the 2.4 percent initially reported and higher than the median estimate of 1.4 percent in a Bloomberg survey. Reports this week may show hiring and manufacturing probably cooled in August, highlighting the risks of a slowdown.

Aluminum for December delivery gained 1.4 percent to 15,650 yuan per ton, and zinc increased 2.8 percent to 17,650 yuan.

http://www.bloomberg.com/news/2010-08-30/copper-climbs-to-four-month-high-on-share-rally-bernanke-japan-optimism.html