06:32 09Feb07 RTRS-CORRECTED - COMMODITIES-Copper closes off lows after Red Kite news

　　 (Corrects copper price change in paragraph four to down 0.45

　　cent from down 4.5 cent.)

　　 By Barani Krishnan

　　 NEW YORK, Feb 8 (Reuters) - U.S. copper futures ended down

　　but sharply off their lows on Thursday after a metals-oriented

　　hedge fund which has suffered sharp losses lately convinced

　　investors to give longer notice to pull out their money.

　　 Among other commodities, oil surged 3.5 percent to close at

　　nearly $60 a barrel [ID:nSP149554]. That pulled up commodity

　　indexes heavily weighted on energy. The S&P GSCI <.GTX> jumped

　　2.2 percent to 5,566.91. The Reuters/Jefferies CRB Index <.CRB>

　　settled 1.5 percent up at 303.45.

　　 Elsewhere, gold rose nearly 1 percent to settle above $660

　　an ounce. Grains from corn to wheat and soybeans also rallied

　　as investors positioned themselves ahead of key crop reports

　　due from the U.S. Department of Agriculture on Friday.

　　 Copper for March delivery on the COMEX division of

　　the New York Mercantile Exchange ended down 0.2 percent, or

　　0.45 cents, at $2.4505 a lb.

　　 The benchmark contract had fallen as much as 3 percent, or

　　around 6.7 cents, during the day, tracking losses in copper

　　trades on the London Metal Exchange. Prices currently are about

　　40 percent lower than the record of more than $4 a lb in seen

　　on COMEX in May 2006.

　　 Thursday's trade in New York began with the typical slide

　　copper has seen in recent days. But the market pulled back from

　　its lows on the back of positive news related to the $1 billion

　　hedge fund Red Kite, which is nursing double-digit losses after

　　190 percent growth in 2006.

　　 "I think the Red Kite story probably did inspire the

　　recovery," said William O'Neill, executive director at

　　commodities brokerage LOGIC Advisors. "The story had a lot of

　　circulation, I've had a number of calls about it today."

　　 People familiar with the performance of Red Kite -- a

　　London-based fund with operations in New York -- said it lost

　　roughly 20 percent in the first days of January. As news of its

　　losses spread last week, copper prices fell to a 10-month low.

　　 Last week, Red Kite said it had asked investors to approve

　　a redemption notice of 45 days before the end of a quarter --

　　instead of 15 days -- to get their money out. It said on

　　Thursday shareholders had voted "overwhelmingly" for the plan.

　　 "When something has gone up 190 percent in a year, it has

　　every right to give back 20 to 30 percent even 40 percent of

　　that value when the price declines a little bit," said a New

　　York metals trader.

　　 "They (Red Kite) asked their shareholders for an extension

　　and the shareholders granted it to them, which implies that

　　there isn't a big panic among shareholders," the trader said.

　　 O'Neill said copper prices could be in for a sharp rebound

　　if COMEX's March contract moves even lower after Thursday's

　　test of the $2.40 a lb support. He put major support for March

　　at $2.25 and resistance $2.55 near-term.

　　 London Metal Exchange's three-months copper contract

　　also traded down 3 percent to $5,260 a tonne before a technical

　　rebound helped it close just $10 down at $5,415.