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US copper futures ended mixed on Friday in a shortened pre-holiday session that saw a decline in volatility following Thursday's frenzied late rally. Benchmark March copper at the COMEX division of the New York Mercantile Exchange was down 0.15 cent at $1.4920 a lb., after trading between $1.4800 and $1.4950. The market closed an hour early and will be shut Monday in observance of the US Presidents Day holiday.

Copper opened lower as investors took profits after Thursday's late rally, which took March to a new contract high of $1.5000.

A late flurry of buying briefly took March higher, but it could not sustain the gains.

A very strong London copper market kept New York from eroding very far.

London Metal Exchange copper closed firmer on Friday, after setting a 16-year peak, as fund buying triggered short covering and put the market within sight of an all-time high of $3,280 a tonne set in 1989, traders said.

London copper was indicated at $3,215/225 a tonne at noon EST (1800 GMT), compared with the previous day's kerb close of $3,157.

New York traders said London's price action on Monday, when US trading is closed, will be crucial to market direction.

If London trades higher, "that should put us in a position to see if we can get this thing up over a buck-fifty," said A.G. Edwards metals analyst James Quinn.

A strong tone in Asian copper trading on Friday suggested that physical demand was strong and could support further market gains, traders said.

They said investment fund buying, which propelled Thursday's gains, was still evident on Friday.

But funds continued to roll March long positions forward as the benchmark month's inverse against April and May narrowed.

A rise in the US producer price index for January boosted the dollar early on Friday, which helped keep copper prices in check. A higher dollar makes the metal less affordable for foreign buyers.

Copper's dramatic rally this week may move miners and government officials in Chile, the world's top copper producer, to rethink their forecasts for this year.

Copyright Reuters, 2005


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