Copper Hits 10-Month Low on Technical Momentum; Gold, Silver Drop

Copper futures at the New York Mercantile Exchange sank rapidly to a more than 10-month low Friday.

The most active copper contract, for March delivery, settled down 10.75 cents at $2.4230 per pound. It reached the weakest level since late March at $2.3850.

Dan Vaught, a futures analyst at AG Edwards, said the market suffered amid follow-through selling from Thursday’s break lower.

“There are also ideas that the increase in metal inventories (is pressuring the market) even though we saw a modest decline in London Metal Exchange inventories today,” said Vaught.

But what is driving the decline, Vaught said, is the technical aspects.

“The market had shown strong support at $2.47 and consolidated at that level but the break below that price caught the attention of (technical traders) and that move has led to a momentum-driven downturn to substantially lower levels,” he said.

April gold settled down $11.50 at $651.50 a troy ounce. March silver dropped 35 cents to $13.375 an ounce.

“To me, this is just a profit-taking move,” said Frank Lesh, broker and futures analyst with Future Path Trading. “We have had a really great run in the gold. It’s up $50 almost in a month.

“This morning, we were trying to push up and make new highs for the week. When we didn’t take out yesterday’s (longtime) highs and just got up to (around) $665, people started to take their money and there was long liquidation.”

Some of silver’s weakness was probably spillover from the weak tone in copper, said Larry Young, senior trader with Infinity Brokerage Services. Silver, in addition to its role as a precious metal, is also an industrial metal, like copper.

“I think it’s profit-taking,” Young continued. “The same (occurred) with gold. We had a nice week up until today. You’re seeing money being taken off of the table.”

April platinum fell $29.30 to $1,163.50 an ounce, while March palladium declined $6.65 to $338.25 an ounce.

The front-month March crude oil contract settled up $1.72 at $59.02 a barrel. February heating oil settled up 2.51 cents at $1.6840 a gallon. February gasoline settled up 4.76 cents at $1.5729 a gallon.

March natural gas settled down 5.4 cents at $7.476 per million British thermal units.

On the New York Board of Trade, March Arabica coffee futures settled up 1.10 cent at $1.1875 a pound.

March cocoa settled down $10 at $1,631 per metric ton.

Futures on raw sugar in foreign ports for March settled down 0.13 cent at 10.50 cents a pound

On the Chicago Board of Trade, soybean futures rallied to a sharply higher close and set several new contract highs on expectations that soybeans will lose out on acreage this spring due to increase corn planting. March soybeans closed up 15.25 cents at $7.3675, and May soybeans ended 15 cents higher at $7.5250.

March corn ended 4 cents higher at $4.02 per bushel.

March wheat rose 1 cent to $4.6125 per bushel.

Source: biz.yahoo.com