BASE metals have closed mostly modestly lower on the London Metal Exchange despite a somewhat buoyant sessions as a generally weaker US dollar improved their affordability to other currency holders and wider risk aversion eased.
At the PM kerb closeon Thursday, LME three month copper was flat at USD 7,814 per tonne while tin was 0.7% higher at USD 20,390 per tonne.
Market sentiment was a little brighter Thursday, helped by the Federal Reserve's pledge on Wednesday to stick to its current accommodative monetary policy, steady bond yields in Spain and Italy and encouraging US economic data.
US durable goods orders and US home sales both saw a slight improvement. Orders for goods designed to last at least three years increased by 9.9% on the month in September, the largest gain in more than two and a half years.
Meanwhile, the National Association of Realtors said that its seasonally adjusted index for pending home sales rose 0.3% on the month in September to a reading of 99.5. Since base metals are used widely in construction and manufacturing investor sentiment is particularly sensitive to economic news and data.
Mr Edward Meir analyst of INTL FCStone said that "In spite of the sloppy tone we have been seeing in the markets over the last week we are reasonably upbeat on price prospects heading into the final two months of the year. Not only should the end of the US election race remove a measure of uncertainty from the markets but investors should start to anticipate progress toward fixing the US 'fiscal cliff.ā€¯
French bank Natixis said that "Most importantly, we think the US economy is picking up steam as the improvements in the labor and housing markets are expected to build from here. Chinese demand for metals should also start to pick up in coming months. Chinese purchases of physical metal tend to be particularly price sensitive; the recent tick lower in LME prices should start to attract opportunistic demand from the region. We would expect to see growing signs of Chinese buying as consumers take advantage of attractive price levels, particularly if the market's expectations for 2013 growth start to scale upwards.ā€¯
