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Metal prices lifted by BOJ move, housing data

By Michael Bellart  (Global Times)

08:35, September 20, 2012

Base and precious metal futures rose Wednesday after Japan's central bank announced that it would ease its monetary policy, though copper found some additional support in improving real estate data out of China and the US.

The most traded copper contract on the Shanghai Futures Exchange (SHFE) jumped 1.56 percent to close at 60,520 yuan ($9,589.64) per ton.

The three-month contract on the London Metal Exchange (LME) was trading 1.3 percent higher at $8,413 per ton when the Chinese mainland markets closed.

The Bank of Japan (BOJ) doubled its asset purchases to inject cash into its economy, which has been hurt by a slowdown in global demand for the country's exports, Reuters reported Wednesday.

SHFE copper closely followed the movement of the LME contract overnight and opened 0.44 percent above Tuesday's closing price.

Copper was up on improvements in key US housing data released Tuesday, according to commodity analysts from the Australian bank ANZ. The National Association of Homebuilders' monthly survey of homebuilders' sentiment rose a bit more than the market expected in September. The index jumped to its highest level since June 2006, while its forward-looking reading hit its highest level since early 2007.

"Markets will be looking to additional US housing data tonight for confirmation of the state of the housing sector. We could see more consolidation this week, with prices in overbought territory," the analysts wrote Wednesday.

Domestic housing prices might also have aided copper. Average real estate prices in 70 cities rose for a third consecutive month last month, though at a slower pace than in past months.

SHFE gold also rose on the Bank of Japan's announcement after opening about 0.5 percent above the previous day's closing price. The December contract rose 0.98 percent Wednesday to close at 365.41 yuan per gram.


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