Make Kitco Your Homepage

METALS-Copper gains as dollar rally pauses; nickel steady above 1-week low

Kitco News

* GRAPHIC-2018 asset returns: * LME/ShFE arb: (Adds official midday prices)

By Maytaal Angel

LONDON, Feb 5 (Reuters) - Copper rose on Monday as the dollar paused after rebounding last week on strong U.S. jobs data, while nickel climbed after posting its largest daily loss in two months in the previous session.

The dollar remained mired near three-year lows as resurgent U.S. wage inflation data failed to quell scepticism among investors about the currency's outlook. U.S. payrolls on Friday showed wages growing at their fastest pace in more than eight years.

"The dollar is driving the market," said Casper Burgering, an analyst at ABN Amro. A weaker dollar makes dollar-priced metals cheaper for non-U.S. investors.

Burgering also noted: "(Relative to) other metals, copper is lagging, it's up only 1 percent for the year. It's undervalued because the fundamentals are really good for this year."

COPPER, NICKEL PRICES: London Metal Exchange copper was last bid up 0.7 percent in official midday rings at $7,094.50 a tonne, while nickel traded up 1.1 percent at $13,575 a tonne, having fallen 4 percent on Friday.

Some of China's stainless steel mills, major consumers of nickel, are losing money at current prices and have already wound down their operations ahead of the week-long Chinese Lunar New Year, broker Argonaut Securities said in a report.

"We expect to see price weakness in nickel going forward," it said.

* MARKETS: Stock markets were routed around the globe while bond yields rose as resurgent U.S. inflation raised the possibility central banks would tighten policy more aggressively than had been expected. * CHINA ECONOMY: China is expected to report solid growth in January trade this week, moderating inflation and renewed bank lending, but the timing of the long Lunar New Year holidays will make it difficult to determine clear trends for at least another month. * LEAD: Lead prices took a breather from Friday's 6-1/2 year top, trading down 1.1 percent in rings at $2,650. Indicating nearby tightness, cash lead traded at a $17.25 a tonne premium to the three month price .

* ZINC: Indicating nearby tightness in zinc, LME data showed one entity holds more than 90 percent of warrants, cash and "tom" positions. Zinc traded up 0.5 percent in rings at $3,518.

* INVESTORS: Hedge funds and money managers cut their net "long" or buy position in COMEX copper in the week to Jan. 30, data showed. * ALUMINIUM: Russian aluminium maker Rusal estimates that China's winter capacity cuts will curb output by 1 million tonnes annually. Aluminium traded down 0.4 percent in rings at $2,202.

* TIN: Tin traded up 0.4 percent in rings at $21,625.

<^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^ Top Base and Precious Metals Analysis - GFMS GRAPHIC-2018 asset returns LME/ShFE arb ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^> (Additional reporting by Melanie Burton, editing by David Evans and Louise Heavens)

Disclaimer: The views expressed in this article are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure accuracy of information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.