Base metals on the London Metal Exchange (LME) have risen from a weak start to the European day to close significantly higher, tracking an upturn in the euro.
At the close of open-outcry trading on Tuesday, LME three-month copper -- the flagship of the base metals complex -- was 0.5 per cent higher from Monday's settlement price at $US8,236 a metric ton.
"Copper moved up through $8,200/ton, having held the technical support at $8,165/ton," noted Sucden Financial analysts.
"Once again there was not much in the way of fundamental news or economic data released, so trading activity was mostly routine in nature," they added.
Most base metals had started the European day lower. Sucden attributed the climb in prices over the course of the session to a weaker US dollar, particularly against the euro.
Prices tracked the euro higher after European Central Bank (ECB) President Mario Draghi sought to calm concerns about currency volatility during a press conference in Spain. The euro firmed against the US dollar, lifting the prices of precious metals.
Also supportive for Europe's common currency was Draghi's comment that "enormous progress" has been made in Spain.
As base metals are priced in US dollars, a comparatively weaker greenback against the euro makes them appear less costly to holders of the European currency. Base metals also track the euro as both assets are risk-related and rise in tandem when risk appetite in global markets is upbeat.
Holiday-thinned trading volumes were also likely exaggerating price moves, with China, Singapore and Hong Kong out for the Lunar New Year public holiday.
"With the Asian market largely absent, participants across the globe kept mostly to the sidelines," noted Standard Bank analyst Marc Ground.
"Another day light on data flow will leave the few participants in the market not on holiday searching for direction," he added.
Prices in dollar a metric ton.
3 Months Metal Bid-Ask Change from
Monday PM kerb
Copper 8236.0-8237.0 Up 37
Lead 2413.5-2414.0 Up 25.5
Zinc 2210.0-2211.0 Up 20
Aluminum 2119.0-2120.0 Up 17
Nickel 18360.0-18365.0 Up 200
Tin 24875.0-24900.0 Up 25
Aluminum Alloy 1880.0-1890.0 Up 30
Aluminum Alloy-NASAAC 1935.0-1945.0 Up 5
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