By Melanie Burton
SINGAPORE, Jan 29 (Reuters) - London copper rose on Tuesday
after a business spending survey suggested a recovery in the
United States was taking root, but gains were capped amid
caution ahead of a Federal Reserve policy meeting and a raft of
U.S and China data this week.
Copper prices on the London Metal Exchange have been largely
confined in a $7,920-$8,250 range so far this month and market
participants do not expect this to change until new year
holidays in top consumer China wind up in mid February.
'A positive data point is more likely to provide additional
confidence to market players in economic recovery but for any
changes to be sustained there has to be significant movements in
the physical markets - imports, premiums or stockpiles,' said
Barclays commodity analyst Sijin Cheng in Singapore.
'But we haven't seen that yet and we're not likely to until
after Lunar New Year,' she added.
Three-month LME copper climbed 0.24 percent to
$8,069 a tonne by 0244 GMT, adding to small gains seen the
The most-traded May copper contract on the Shanghai Futures
Exchange hit its highest since Oct. 19 at 58,850 yuan
($9,500) a tonne before paring gains to trade almost flat at
58,630 yuan a tonne.
Riskier assets, including metals, oil and equities, mostly
gained as a rise in a gauge of planned U.S. business spending in
December added to a recent run of positive global economic data.
More solid U.S. growth indicators would, however, fuel
speculation the Fed may mull pulling back on aggressive easing
stimulus. Traders are now waiting for the outcome of the Fed
policy meeting and Friday's string of figures including
indicators on China's manufacturing sector and a key U.S. jobs
report for further cues.
The Fed, whose policy-setting Federal Open Market Committee
concludes a two-day meeting on Wednesday, said just last month
that it expects to keep short-term interest rates exceptionally
low until the U.S. unemployment rate falls to 6.5 percent,
But figures on Friday are likely to show that the jobless
rate was unchanged in January at 7.8 percent, while the economy
created 155,000 jobs, the same as in December.
'We would have thought rising equity markets in China or
settlement of the U.S. fiscal cliff would have been enough to
get things going, but clearly the market is looking for some
other form of inspiration,' said RBC Capital in a note.
'What form that inspiration will take is yet to be seen, so
it looks as if the markets will dance in tune with the dollar
until further notice,' it added.
Against the dollar, the euro pulled back a little to
$1.3450, off an 11-month high of $1.3479 set on Friday. A weaker
dollar makes commodities priced in the greenback cheaper for
holders of other currencies.
The copper market could draw some support from news that
China's top think tank had lifted its economic growth forecast
for 2013 to 8.4 percent from 8.2 percent, with faster expansion
seen in the first half of the year.
A Reuters poll earlier this month pegged China's annual
economic growth at 8.1 percent for this year.
China is the world's top consumer of copper, accounting for
roughly 40 percent of refined demand.
The HSBC Flash Purchasing Managers' Index (PMI) last week
showed growth in the country's factory sector accelerated to a
two-year high in January, as manufacturers received more local
and foreign orders.
Base metals prices at 0244 GMT
Metal Last Change Pct Move YTD pct chg
LME Cu 8069.00 19.00 +0.24 1.77
SHFE CU FUT MAY3 58630 40 +0.07 1.65
HG COPPER MAR3 366.85 0.70 +0.19 0.44
LME Alum 2045.00 -5.00 -0.24 -1.26
SHFE AL FUT APR3 15160 -10 -0.07 -1.21
LME Zinc 2080.00 -1.00 -0.05 0.80
SHFE ZN FUT APR3 15590 45 +0.29 0.29
LME Nickel 17560.00 -65.00 -0.37 2.36
LME Lead 2382.00 4.00 +0.17 1.79
SHFE PB FUT 15370.00 -25.00 -0.16 0.79
LME Tin 24400.00 0.00 +0.00 4.27
LME/Shanghai arb^ 312
Shanghai and COMEX contracts show most active months
($1 = 6.2226 Chinese yuan)
(Editing by Himani Sarkar)
((firstname.lastname@example.org)(+65 6870 3017)(Reuters
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