Base metals were gaining during the early trading hours Thursday. The upward momentum is expected to be sustained during the day following expected better initial jobless claims data and further declines in the dollar index.

Copper

Copper for three-month delivery gained 1.6% to $7,215 per tonne on the London Metal Exchange, supported by a weakening dollar index. LME copper inventories were down 1,400 tonnes to 402,425 tonnes Wednesday. The metal faces support and resistance at $7,158 and $7,233, respectively.

BHP Billiton(BHP) announced that subsequent to the hostile bid for Potash(POT), it is seeking more acquisitions on its flexibility to invest additional capital. Going ahead, the company is looking for merger and acquisition deals in the oil sector.

Escondida, the world's largest copper mine (57.5% owned by BHP Billiton), is likely to face production declines of 5% to 10% by mid-2011 because of lower grades, BHP said. . For the first half of 2010, the mine produced 526,050 tonnes of copper. Rio Tinto(RTP) owns a 30% stake in the mine..

Southern Copper(SCCO), which closed at $28.35 in the previous trading session, has support at $27.75 and faces resistance at $28.72. Freeport-McMoRan Copper & Gold(FCX) closed at $66.66 with support and resistance at $65.96 and $67.12, respectively. Teck Resources(TCK) closed at $31.75 with support at $30.76 and resistance at $32.28.

Aluminum

Aluminum for three-month delivery on the LME was up Thursday 1.1% to $2,025 per tone. LME aluminum stockpiles narrowed 3,675 tonnes to close at 4.45 million tonnes Wednesday. Aluminum faces support at $2,011 and resistance at 2,036.

Alcoa(AA) closed trading Wednesday at $10.11 finding support and resistance at $9.97 and $10.21, respectively. Century Aluminum(CENX) closed at $9.55 with support at $9.39 and resistance at $9.71. Kaiser Aluminum(KALU) closed at $36.95, finding support at $35.99 and resistance at $37.46.

Nickel

Nickel for three-month delivery rose 1.9% to $20,480 per tonne on the LME. LME nickel inventories added 792 tonnes to 118,302 tonnes. Support and resistance level for the metal stands at $20,267 and $20,607, respectively.

Zinc

Zinc for delivery within three months soared 3.4% to $2,030 per tonne on the LME. After peaking to 52-week highs Wednesday, zinc stockpiles added 825 tonnes to close at 622,175 tonnes, recording yet another 52-week high. Zinc has a support at $1,997 and resistance at $2,050.

• [Editor:editor]