Copper hits record high; gold ends with gains Seasonal pattern points to 2% gain for gold, MF Global says

By Laura Mandaro and Deborah Levine, MarketWatch 

SAN FRANCISCO (MarketWatch) — Copper futures closed at a record high Tuesday after Chile’s Collahuasi copper mine, one of the world’s largest, said it had halted shipments of copper concentrate.

Gold futures, which had lagged for most of the session, made a late session turn to join the rest of the metals with closing gains.

High-grade copper for March delivery /quotes/comstock/21e!f1:hg\h11 (HGH11 428.75, +1.15, +0.27%)  ended up 7 cents, or 1.7%, at $4.276 a pound by the close of trading on the Comex division of the New York Mercantile Exchange. That was the highest settlement for a front-month contract, according to the exchange. The contract touched $4.29 early in the U.S. trading session, according to FactSet Research.

Copper miner Freeport McMoRan Copper & Gold’s /quotes/comstock/13*!fcx/quotes/nls/fcx (FCX 116.45, +0.25, +0.22%)   shares gained 1.8% in New York, while an exchange-traded note that tracks copper — the iPath Dow Jones UBS Copper Subindex Total Return /quotes/comstock/13*!jjc/quotes/nls/jjc (JJC 58.11, +1.11, +1.94%)  — gained 1.7%.


Port facilities for the Collahuasi mine, mostly owned by Anglo American PLC /quotes/comstock/23s!e:aal (UK:AAL 3,258, +116.50, +3.71%) and Xstrata PLC /quotes/comstock/23s!a:xta (UK:XTA 1,504, +48.50, +3.33%) , halted exports of copper concentrate after an accident reportedly killed three workers and prompted the mine operators to declare force majeure. Read more on Anglo American, Xstrata.
 
The ability to declare force majeure, an event that cannot be reasonably anticipated or controlled, is typically written in many commodity contracts to protect producers from breaching contracts in situations such as rebels blowing up pipelines or damage arising from lightning strikes. Read full story on halted Chilean copper shipments. 
 
Analysts said the shipment halt at Collahuasi and Chinese trade data on Tuesday added momentum to a rally that’s lifted copper futures 15% in just under a month.

“Copper has been pushing higher for some time,” said Bruce Zaro, chief technical strategist, at Delta Global Asset Management in Boston.

“There have been a lot of rumors in the past week of a shortage of copper at the London Metals Exchange,” he said, and also helping, demand has been strong from China and other countries.

Gold for February delivery /quotes/comstock/21e!f:gc\g11 (GCG11 1,387, -1.70, -0.12%)  ended up $2.70, or 0.2%, at $1,388.8 an ounce.

Gold’s moves toward year-end are likely to be influenced by shifts in the euro and dollar, and portfolio managers’ efforts to close out the year with gains.

“The currencies are likely to lend further direction in the coming days, but as a whole we expect trade will remain mixed as traders carry out book squaring in relatively thin conditions,” said James Moore, research analyst at FastMarkets.

Support for gold has also come from worries about European sovereign debt and from a strong seasonal year-end pattern, said analysts at MF Global.

Buying gold on Dec. 22 and covering that position on Dec. 29 has been profitable in all 10 of the past 10 years, the firm said. The average gain is about 2%. For this year, that would mean a gain of about $28 an ounce.

March silver /quotes/comstock/21e!f1:si\h11 (SIH11 2,938, -1.40, -0.05%)  also turned higher by the close. It added 4 cents, or 0.1%, to $29.39 an ounce.

Palladium for March delivery /quotes/comstock/21n!f:pa\h11 (PAH11 754.25, +1.20, +0.16%)   added $8.3, or 1.1%, to $753.05 an ounce, and the January contract for platinum /quotes/comstock/21n!f2:pl\f11 (PLF11 1,724, +12.90, +0.75%)  rose $11.20, or 0.7%, to $1,721.90 an ounce.

Laura Mandaro is a MarketWatch editor, based in San Francisco. Deborah Levine is a MarketWatch reporter, based in New York.