By: Martin Hayes

London 24/08/2012 - Base metals were ranging narrowly at lower levels during Friday LME premarket trading when this week's rally paused, given a modest downshift in wider market sentiment, traders said.

"There was a bit of business early on but it is slower now - the usual premarket, really," a trader said.

Crunch eurozone meetings that will take place surrounding Greece and mixed signals concerning US monetary stimulus have led to some caution ahead of a long UK holiday weekend.

The move reflected a similar pattern in other markets, such as equities and the euro, with caution over the sovereign eurozone debt picture in general, and Spain and Greece in particular, setting in.  

"With meetings tomorrow and Saturday we could see some clarity regarding the European leaders' attitudes to Greece, and the chances of them remaining in the euro," another trader said.

The single currency, at a seven-week high of 1.2590 against the dollar on Thursday, dipped back to around 1.2545 this morning, while stock markets in Europe dropped.

"Concerns over global growth continue to weigh on equities and in the absence of further stimulus it may be that the industrial metals start to struggle to hold onto recent gains," William Adams of Fastmarkets said.

US economic data on Thursday was mixed. July growth in new homes sales over the previous month boosted confidence in the housing market recovery but there was an increase in weekly unemployment claims.

Today is relatively light for data flow, with US releases restricted to July durable goods orders figures this afternoon. For the metals, the session may see book-squaring and profit-taking later ahead of the long UK holiday weekend - the LME is closed on Monday for a public holiday.

Price moves today may be less defined, albeit with an upward bias given the technical drives seen this week, which has seen the complex show signs of moving out of the neutral summer bands.

"We would not be surprised if some consolidation sets in across the metals but, given the strength of the recent rallies, any pause may be short-lived. Indeed, if the consolidation is minimal, that will say a lot about how sentiment has become more bullish," Adams added.


COPPER MARKS TIME BELOW $7,700/T

Copper settled back after hitting one-month highs of $7,720.50 on Thursday to trade at $7,649 per tonne, a $35.50 loss. Inventories fell a net 1,600 tonnes to 235,550 tonnes.

Aluminium fell back below $1,900 to trade at $1,893, an $11.50 loss, while inventories resumed their downtrend after two days of increased warranting - stocks were down 9,025 tonnes at 4,904,025 tonnes.

In other metals, zinc traded at $1,845, a $7 loss. Stocks fell further, down 3,550 tonnes at 965,375 tonnes. Lead business at $1,950 was $1.50 lower, with inventories dropping 675 tonnes to 315,125 tonnes.

Tin, which hit $20,069 in the previous session, its highest since May 7, was poised at $20,000, up $50 and looking to extend a technical break. Stocks fell 45 tonnes to 11,585 tonnes.

Nickel at $16,380 was down from yesterday's $16,475 - inventories declined 312 tonnes to 114,522 tonnes. Steel was indicated at a wide $355/380, while stocks fell for the 12th day in a row, down 260 tonnes at 53,950 tonnes.

In the minors, cobalt was unchanged at $29,000/30,000, while molybdenum was neglected - there were no inventory movements in either.


(Editing by Mark Shaw)