PDA

View Full Version : Copper's second weekly increase due to U.S. growth outlook



Ardent Listener
2nd September 2007, 20:27
Copper's second weekly increase due to U.S. growth outlook.


Copper Heads for Second Weekly Increase on U.S. Growth Outlook

By Millie Munshi

Aug. 31 (Bloomberg) -- Copper rose, capping a second straight weekly gain, on signs that U.S. economic growth may buoy metals demand.

Consumer spending, wages and orders placed with U.S. factories rose more than forecast in July, reports showed today. The Federal Reserve will ``act as needed'' to limit the economic fallout from a housing recession, Chairman Ben S. Bernanke said.

``There's a whole catalyst of events that are pointing toward a better economic outlook,'' said William O'Neill, a partner at Logic Advisors in Upper Saddle River, New Jersey. ``There's a restored level of confidence in the market.''

Copper futures for December delivery rose 4.9 cents, or 1.5 percent, to $3.397 a pound on the Comex division of the New York Mercantile Exchange. That's the highest closing price since Aug. 13 and pushed the contract to a 1.4 percent gain this week.

The metal has still lost 6.9 percent in the past month on speculation losses tied to defaults on subprime mortgages would slow expansion in the U.S., the world's second-largest copper consumer after China.

``There's a better sentiment toward the economy,'' said Patrick Chidley, an analyst at Barnard Jacobs Mellet LLC in Stamford, Connecticut. ``There's still a strong supply and demand situation in these markets.''

Consumer Spending

Consumer spending in the U.S. rose by 0.4 percent in July after a 0.2 percent increase in June that was bigger than initially estimated, the Commerce Department said today. Incomes increased 0.5 percent and factory orders gained 3.7 percent.

Bernanke, speaking in Jackson Hole, Wyoming, said the Fed ``will act as needed to limit the adverse effects on the broader economy that may arise from the disruptions in the financial markets.'' President George W. Bush today pledged to help people who've fallen behind in their mortgages keep their homes.

``The entire tone of the financial markets has shifted from extremely negative to positive today,'' Logic Advisor's O'Neill said. ``The gloom and doom about the U.S. economy seems to have reversed.''

On the London Metal Exchange, copper for delivery in three months gained $60, or 0.8 percent, to $7,460 a metric ton.

To contact the reporter on the story: Millie Munshi in New York at mmunshi@bloomberg.net .

Last Updated: August 31, 2007 14:13 EDT

http://www.bloomberg.com/apps/news?pid=20601012&sid=aEB288UOXrfM&refer=commodities