The gains were “to some extent driven by short-covering,” Jesper Dannesboe, senior commodity strategist at Societe Generale in London, said by telephone. “Maybe yesterday's rate b cut from the ECB was a small contributing factor to that.”
LME copper inventories fell 1.2 percent, the most since Oct. 25, to 608,700 metric tons, daily figures showed. That rounded out a 1.8 percent weekly drop, the first since the week ended Jan. 25. Orders to remove copper from warehouses slid 4.9 percent, the most since March 6, to 158,900 tons.
Eoin Treacy's view If biotechnology represents one of the best performing sectors over the last four months, then basic resources represents one of the worst. However as overbought conditions among some of the high fliers are at risk of unwinding, the outlook for at least a bounce in the resources sector has improved.
The FTSE 350 Mining Index broke downwards to post a new 3-year low in late April but may now be forming a failed downside break. A countermanding downward dynamic would be required to check potential for a further unwind of the short-term oversold condition.
BHP Billiton, Rio Tinto, Glencore and Anglo American represent more than 80% of the Index. BHP Billiton, Rio Tinto and Glencore are all bouncing from the lower side of their respective ranges while Anglo American has found at least short-term support above 1500p and appears to be unwinding the short-term oversold condition relative to the 200-day MA.