Copper up but down on week

Copper ended higher on Friday, but snapped a streak of five consecutive weekly gains, as momentum stalled as the dollar steadied and investors sided with caution ahead of the Group of 20 meeting in South Korea.

"Looks like a congestion day here ahead of the G20 meeting this weekend," said Adam Klopfenstein, senior market strategist with Lind-Waldock.

"A lot of these markets are flattening out… We're looking at a lack of direction in equities and in the currencies, which has left the copper kind of stuck in a very small rangebound pattern," he said.

Advertisement: Story continues below Copper for December delivery on the COMEX metals division of the New York Mercantile Exchange ended up 1.55 cents at $US3.7970 per lb, after dealing between $US3.7515 and $US3.8155.

Earlier this week, the benchmark December contract rallied to fresh 27-month peak at $US3.88, but has since fallen back and looked vulnerable for another challenge of its 20-day moving average.

On the London Metal Exchange （LME）, benchmark copper closed up $US28 at $US8,335 a tonne. On Tuesday, it vaulted to its highest level since July 2008, at $US8,492.

Lead hit a nine-month high and zinc hovered close to a six-month peak, buoyed by the shutdown of China's third-largest lead and zinc smelter.

"Clearly dollar is playing a role at the moment in price moves," said David Wilson, an analyst at Societe Generale.

"（Copper） is pausing for breath waiting to see what happens… with the G20 meeting. There are bigger picture issues of further US quantitative easing but we have to wait until the beginning of November to see any clearer decision there."

The dollar was on track on Friday to snap a five-week losing streak against major currencies as wariness persisted over whether any clear agreement can be reached at the G20 meeting.

A stronger dollar makes commodities more expensive for holders of other currencies. Talk of quantitative easing - expected to be announced next month by the US Federal Reserve - to boost the world's largest economy has been knocking down the dollar.

Copper continued to be supported by a tightening fundamental backdrop. The latest report from the International Copper Study Group showed the market deficit widened to 356,000 tonnes between January and July this year, more than twice the level seen at the same time last year.

Copper inventories held in LME-bonded warehouses fell by 1,175 tonnes to 368,825 tonnes, the lowest levels in one year, the latest data showed. They have now subsided by a third from cycle highs above 555,000 tonnes in mid-February.

Even though copper supply remains tight, buyers are reluctant to chase prices higher at these levels, two London floor traders said.

"I think metals are gearing up for a correction. It's overdue.

I think a month from now, metals prices will be lower," one of them said.

Across other metals, aluminum edged up $1 to close at $2,365 a tonne.

Lead hit its highest since January, at $2,548 a tonne, before ending up $45 at $2,530.

Zinc gained $38 to $2,512, but backed away from an earlier six-month peak of $2,540.25.

Nickel dropped $325 to close at $23,225, due to a lack of apparent demand. LME stocks have been rising in recent weeks, with a 930-tonne shipment into South Korea's port of Busan, seen in LME data, helping total stocks rise to the highest in almost four months.

Tin closed down $100 at $26,400. It hit a record high of $27,338.50 on October 14, amid falling supply from top tin exporter Indonesia.