US copper gains hold into close as dollar weakens

U.S. copper futures held onto gains into Thursday's close, achieved after the dollar dropped to a 6-week low against the euro, but traders said the upside was capped as investors fretted over approval of a bailout package for U.S. automakers.

Copper for March delivery HGH9 finished 1.65 cents, or 1.10 percent, higher at $1.5120 per lb on the New York Mercantile Exchange's COMEX division.

The range high reached up to $1.5170, a shade below the day-earlier high, but the session bottom was higher at $1.4695 a lb.

COMEX set final copper futures volume at 10,006 lots.

The dollar's decline and oil's surge lifted copper and other base metals - traders.

The dollar's slide to a seven-week low against the euro compelled investors to jump into dollar-denominated metals in overseas markets. [USD/]

Oil surged over 10 percent, settling near $48 a barrel after OPEC president calls for more production cuts. [O/R]

 "Today, we saw a bit of a pop (in copper). We had crude futures up 12 percent at one point with commodities across the board moving higher on dollar weakness," Matthew Zeman, head of trading with LaSalle Futures Group in Chicago.

Concern over the fate of the U.S. government's bailout package for automakers was limiting copper's upside - traders.

The White House urged skeptical Senate Republicans to back the bill, but Republicans appear to have more than enough votes to stop the bailout.

Some investors think copper's 3-1/2-year lows hit last Friday presented a solid buying opportunity - traders.

Chartists continue to look for copper to consolidate last week's sharp decline - analysts.

To predict a longer-term bottom, technicians would need to see copper remain within its current range for several weeks, then ratchet higher over time - analysts.

"It looks like some selling pressure has abated. But I'd like to see copper consolidate for awhile. Then if it starts to move up I'd feel more comfortable getting long," said Zeman.

LME copper for three-month delivery MCU3 climbed to $3,320 a tonne by Thursday's finish from $3,305 a tonne at Wednesday's kerb close. 

London Metal Exchange copper warehouse stocks lost 750 tonnes to 302,850 tonnes on Thursday.

COMEX copper stocks stood even at 18,306 short tons as of Tuesday.

information from www.reuters.com