Copper rallies on signs of improving US home sales

AP News
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Posted: Feb 24, 2012 3:36 PM
Copper rallies on signs of improving US home sales

Copper rallied Friday after the housing market shows more signs of improvement, which offered investors hope that demand may be strengthening for the industrial metal.

The Commerce Department said sales of new homes fell nearly 1 percent in January but revised figures for the last three months of 2011 showed sales were stronger than expected. In addition, The National Association of Realtors said Wednesday that sales of previously occupied homes were at their highest level since May 2010.

Investors were also encouraged by reports that inventories have declined in Chinese warehouses, said George Gero, vice president at RBC Global Futures in New York. The world's second-largest economy is a huge importer of copper, which is used in everything from infrastructure and housing to consumer products.

Gero said that there also are expectations demand will pick up as infrastructure projects get under way during the next few months in Asia, Europe and the United States.

Copper for March delivery rose 5.7 cents to finish at $3.863 per pound. The price is up about 12 percent for the year.

Other commodities were mixed ahead of a weekend meeting of the finance ministers from the world's 20 leading economies. The G-20 finance ministers and central bank governors will focus on economic growth but Europe's debt crisis likely will be a priority topic.

Gold for April delivery fell $9.90 to finish at $1,776.40 an ounce as investors took profits after this week's gains. In March contracts, silver fell 21.8 cents to end at $35.338 per ounce and palladium ended down $7.65 at $710.75 per ounce. April platinum decreased $7.90 to finish at $1,715.10 an ounce.

Oil prices continued to climb on supply concerns because of the dispute over Iran's nuclear program. The European Union and the United States are using sanctions against Iran because they fear the country is developing a nuclear weapon. Iran denies the charge.

Benchmark oil rose $1.94 to finish at $109.77 per barrel on the New York Mercantile Exchange.

Heating oil increased 2.3 cents to finish at $3.313 per gallon, gasoline futures rose 3.67 cents to $3.3247 per gallon and natural gas fell 7.1 cents to $2.55 per 1,000 cubic feet.

In March agriculture contracts, wheat prices rose 0.25 cent to end at $6.4125 per bushel, corn increased 1.5 cents to $6.44 per bushel and soybeans ended up 3.25 cents at $12.8675 per bushel.