(23/04) Copper Gains on Industrial Orders, German Business Confidence

April 23, 2010

Copper rose in London, reducing a second weekly drop, as the dollar weakened after European industrial orders and business confidence in Germany increased more than estimated.

Orders to industrial companies in the 16-nation euro area gained 1.5 percent in February, the European Union statistics office said. Economists forecast a 1 percent climb, according to the median of 20 estimates in a Bloomberg News survey. The Munich-based Ifo institute's business climate index advanced to 101.6, above the 98.7 estimated in a Bloomberg survey.

"A positive German Ifo number saw a recovery in the euro, which helped to lift base metals," said Randy North, a trader at RBC Capital Markets in London.

Copper for delivery in three months rose $35, or 0.5 percent, to $7,725 a metric ton at 10:31 a.m. on the London Metal Exchange, narrowing this week's retreat to 0.5 percent. Futures for July delivery gained 0.3 percent to $3.5165 a pound on the Comex in New York.

The U.S. Dollar Index, a six-currency gauge of the greenback's strength, slipped 0.1 percent, erasing a climb of as much as 0.6 percent. Gains by the dollar make commodities priced in the currency more expensive in terms of other monies.

The index is still up 0.8 percent this week, lifted by concern about sovereign finances in Europe. Moody's Investors Service yesterday cut Greece's debt rating after the EU said the country's budget deficit last year was wider than forecast by the government.

"Concerns about sovereign risk remain, and gains are likely to be capped for the moment," RBC's North said.