Base metals on the London Metal Exchange are mixed, with prices fluctuating around the previous session's close and holding tight ranges as investors await a key employment reading from the U.S. At 1008 GMT, LME 3-month copper was flat on the day at $8,303 a metric ton. Lead prices had moved the most, down 0.9% at $2,269.25/ton, while trading volumes remained thin during the Chinese Golden Week public holiday. "Generally the metals continue to hold up well, but they are lacking the conviction to press on with the early September rally," said FastMarkets.com head of research William Adams. "That said, given the speed and distance the initial rallies travelled it is unsurprising that prices have paused as traders get acclimatized to the higher price levels," he added, referencing the jump in base metal prices in the wake of the U.S. Federal Reserve's recent announcement of 'QE3'. The euro is trading weaker on the day although still generally elevated after European Central Bank President Mario Draghi continued to stress that the outlook for Europe was gloomy on Thursday, but he reiterated that the ECB was ready to purchase bonds if necessary. Base metal prices take support from a stronger euro versus the dollar, as it makes the dollar-denominated metals more appealing to other currency holders. Quiet conditions persist for the base metal complex in the short-term, as investors hold their breath awaiting U.S. nonfarm payrolls data due for release at 1230 GMT. The monthly reading is important for copper prices, due to the red metal's widespread use across different sectors of the economy. Even so, the recent launch of the open-ended third round of quantitative easing by the U.S. means that even a weak reading could boost prices if investors interpret it as a green flag for further stimulus. Looking further ahead, hopes that the recently-announced Chinese infrastructure spending will filter through to base metal restocking continues to underpin prices. However, uncertainty in the euro zone, particularly regarding the likelihood of a formal Spanish bailout request, and concerns regarding the U.S. fiscal cliff are likely to continue to weigh. Market participants are also likely to set their sights on the U.S. presidential election before long. With so many precarious dynamics at play, market watchers are widely seeing upside scope for base metals in the short- to medium- term, but reluctant to forecast any certain gains in the longer-term. In this regard, though technical analysts at Barclays remain bullish toward copper in the medium term, in a note to clients Friday, they stated they nevertheless look for a move below $8,155/ton to target levels around $8,080/ton. Elsewhere in the base metal complex, aluminum was flat at $2,112.5/ton, zinc was just 0.1% lower at $2,063/ton, nickel was 0.1% higher at $18,695/ton, while tin was 0.4% higher at $22,600/ton. Write to Laura Clarke at laura.clarke@dowjones.com Read more: http://www.foxbusiness.com/news/2012/10/05/base-metals-lme-metals-steady-ahead-us-payrolls/#ixzz28QJVDMzS

Source