- Base metals took a breather from earlier short-covering activity that catapulted copper to new three-month highs above $7,400 per tonne and galvanised other contracts amid improving risk appetite but little fundamental business. - "It's all technical," a trader said. "There's nothing fundamental behind it - what's changed? Everyone thought $7,200 was the top of the range and shorted it, so we have seen a lot of technical buying that has carried us into a new trading band." Options activity could affect prices as traders adjust hedges to last week's massive rise, he added. - Copper, at three-month highs of $7,427 earlier, drifted back to $7,380 per tonne, still up $82 from Friday while aluminium, which hit its highest in two-and-a-half months high above $2,200, hovered around $2,191, up $21 on the day. Lead's premium over zinc grew, with three-month lead $37 higher at $2,112 while zinc was up just $11at $2,036. - Sentiment was buoyed by further evidence that the European economic recovery is gathering pace. On Wall Street, stocks were called to open sharply higher following gains of around two percent in Europe. Strong earnings from BNP Paribas and HSBC, two of Europe's biggest banks, contributed to the upbeat tone as did an improved EU manufacturing sector report. EU PMI came in at 56.7, beating expectations for a reading of 56.5; a number above 50 signals expansion. The dollar held softer against the euro at 1.3067, little changed from the morning session.

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