NEW YORK (Dow Jones)–Copper futures rose Tuesday, bolstered by a weaker dollar and stronger U.S. economic data.
Copper for March delivery, the most-active contract, gained 6.10 cents, or 1.8%, to settle at $3.3695 a pound on the Comex division of the New York Mercantile Exchange.
December-delivery copper rallied 6.20 cents, or 1.9%, to settle at $3.3630 a pound.
Copper futures lurched higher after the latest report showed U.S. housing starts vaulted past expectations, rocketing up 9.3% in November to their highest level in 19 months.
The report was “encouraging” for copper prices, traders at Sucden Financial said in a note to clients. Copper is widely used in electrical wiring and water plumbing in residential construction.
A stronger euro, which breached the $1.31 level for the first time in a week, helped copper prices to maintain their upward momentum. Copper futures are denominated in dollars and can appear less expensive to investors who use other currencies when the U.S. currency eases.
Copper futures also drew strength from a report showing German business confidence improved in December, overturning expectations of a decline.
However, the longer-term outlook for copper is growing dark as an imminent slowdown in China’s demand for the industrial metal, which is set to coincide with a recession in Europe, will likely see copper prices slip below $3 a pound in early 2012, Bart Melek, head of commodity strategy at TD Securities, said in a note to clients.
“The slower global economy implies that world consumption will increase by less than 3.5% next year, compared to a 7.4% average in the last two years,” Melek said.
Copper settlements (ranges include electronic and pit trading): Dec $3.3630; up 6.20 cents; Range $3.3230-$3.3785 Mar $3.3695; up 6.10 cents; Range $3.2855-$3.3900
-By Tatyana Shumsky, Dow Jones Newswires; 212-416-3095; firstname.lastname@example.org