MW: Copper rises on OECD outlook and durables data
Gold futures on the mend, trending back toward $940 mark
NEW YORK (MarketWatch) -- Copper futures rose for a second session Wednesday as the Organization for Economic Cooperation and Development raised its growth forecast, boosting expectations for improving demand for the industrial metal.
Also helping copper, the Commerce Department reported a better-than-expected increase in durable-goods orders for May. It was the third increase in the past four months in orders for big-ticket items. See Economic Report.
In other metals, gold and silver moved higher as metals traders await the Federal Reserve's latest monetary-policy statement due out Wednesday afternoon.
The OECD forecast helped push copper higher, said MF Global analyst Edward Meir, adding a note of caution: "It remains to be seen where we head from here, as the short-term chart picture still looks somewhat wobbly."
Copper for July delivery rallied 5.25 cents, or 2.4%, to $2.251 a pound on the Comex division of the New York Mercantile Exchange.
Copper's two-day gain has largely recouped its 5% slump on Monday. Copper had hit an eight-month high earlier this month.
As revised, the economy of the 30-nation OECD will grow 0.7% in 2010, the Paris-based group said, raising its estimate for the first time in two years. It expected this year's economy to shrink by 4.1%, smaller than the OECD's earlier forecasts.
In March, the OECD had forecast a 4.3% contraction this year and a 0.1% fall in 2010. See full story.
London copper inventories fell to 276,275 metric tons on Tuesday, down 1,325 metric tons from the previous session, exchange data showed. Inventories were down 57,100 metric tons from a month ago.
Despite its recent gains, some analysts warned that copper is facing further downward pressures.
"Fundamentals still point to lower copper prices," said analysts led by Barbara Lambrecht at Commerzbank.
"The steep copper price increase of the past months was not the result of an improved underlying demand, but was largely attributable to special factors, such as China's reserve purchases," they wrote in a Wednesday note.
Gold, silver rise
In other metals, August gold rose $15.20, or 1.6%, to $939.60 an ounce, recovering as the metal hit a six-week low on Monday. Silver also gained, with the July contract up 18.5 cents, or 1.3%, at $14.03 an ounce.
"Dollar watching will provide direction [for gold] in the coming sessions," said James Moore, analyst at TheBullionDesk.com. If the Fed keeps rates low, "investors may again turn to stronger performing assets such as commodities."
In exchange-traded funds, holdings in SPDR Gold Trust (GLD 91.79, +0.87, +0.96%) , the biggest gold ETF, stood at 1,131.24 metric tons Tuesday, unchanged from Monday. Holdings declined on Monday for the first session in 12.
Holdings in the iShare Silver Trust (SLV 13.80, +0.18, +1.32%) , the largest silver ETF, stood at 8,724.86 metric tons on Tuesday.
Rounding out the metals action, September palladium gained $3.95, or 1.7%, to stand at $240.95 an ounce, while July platinum rose $8.10, or 0.7%, to $1,173.50 an ounce.
