Copper rose in New York, narrowing the biggest weekly drop in almost a year, as a technical gauge suggested the slump was overdone. Nickel headed for a bull market on concern sanctions against Russia might limit supply.
Copper’s 14-day relative-strength index, measuring whether a commodity is overbought or oversold, stayed below the level of 30 that suggests a potential impending advance to some analysts who study technical charts. The U.S. and Germany have threatened sanctions over Russian support for the March 16 referendum that may see Ukraine’s Crimea region vote to join Russia.
“The recent selloff looks overdone, in our view, since micro trends have likely bottomed,” Gayle Berry, an analyst at Barclays Plc in London, said in a report today. “We think risk/reward of buying copper at these lows is attractive.”
Copper for delivery in May added 1 percent to $2.953 a pound by 8:48 a.m. on the Comex in New York. The 4.2 percent weekly decline is the biggest since April. Copper for delivery in three months rose 1 percent to $6,480 a metric ton on the London Metal Exchange.
Prices slumped 12 percent this year, the most among the six main metals traded on the LME. Nickel led gains, rising 14 percent after Indonesia, the biggest producer of the metal from mines, barred ore exports in January. OAO GMK Norilsk Nickel, based in Moscow, is the world’s largest refined-nickel producer.
“Supply concerns are the major driving force here (Indonesia, Russia),” Daniel Briesemann, an analyst at Commerzbank AG in Frankfurt, said by e-mail today.
Nickel for delivery in three months rose as high as $15,999 a ton on the LME. A close at that price would be a 20 percent gain from the four-year low reached Nov. 27, meeting the common definition of a bull market. The metal was last at $15,894.
“Crimea concerns continue to weigh on sentiment, following clashes in Donetsk yesterday,” Vicky Sanders, head of analytics sales at Marex Spectron Group in London, said by e-mail today.
Copper stockpiles monitored by the LME, at a 15-month low, dropped for an eighth session to 251,300 tons, daily data showed. Orders to remove the metal from warehouses jumped 8.8 percent to 129,800 tons on bookings in New Orleans.
Lead, tin and zinc rose in London. Aluminum slipped.