Copper gained 0.6% to $9,819 a tonne, having hit its lowest level since May 2, at $9,741, after speculators cut their bullish bets.
Reuters.- Copper rebounded from five-week lows on Monday, overcoming initial declines, as market attention focused on improving fundamentals.
At 1000 GMT, benchmark copper on the London Metal Exchange (LME) gained 0.6%, to $9,819 a ton, after having hit its lowest level since May 2, at $9,741, after of speculators cutting their upward bets.
Traders expect fresh buying on Tuesday, when China concludes the Dragon Boat Festival holiday.
The selling began on Friday, following data showing strong U.S. job growth in May, suggesting the Federal Reserve may not cut interest rates as soon as expected.
This caused the dollar to rebound, making metals more expensive for holders of other currencies, in a relationship used by funds to generate buy and sell signals from numerical models.
“Such an overreaction can only occur in the futures markets if traders square their positions based on some form of automated trading,” said Carsten Menke, an analyst at Julius Baer.
“The fundamental backdrop looks solid, but we have to see what happens if this global manufacturing recovery that everyone is expecting – based on PMIs – actually materializes.”
Surveys of purchasing managers in China, the world’s leading consumer, showed a rebound in manufacturing activity, especially in smaller companies.
In other base metals, aluminum on the LME fell 0.6%, to $2,563 a ton; zinc rose 1.1%, to $2,798; lead fell 0.4%, to $2,191; tin gained 0.8%, to $31,695; and nickel improved 0.1%, to $18,055.
