The base metals were all in positive territory on Friday. Copper rallied through the mid-morning of the New York day, peaking above $2.75, before easing but still finishing in the black at $2.6757/lb., up 4 cents. Nickel was sharply higher in the pre-dawn hours, but held a good part of its gains through the day, closing at $6.8697/lb., up 19¼ cents.

Zinc had a good day, ending at $0.7208/lb., up nearly a penny and a half. Aluminum edged higher, adding a penny and a quarter, to $1.0331/lb., while lead posted a modest gain of a penny, at $0.7732/lb.

Copper went up for the first time in six sessions yesterday, as traders grew optimistic in the run-up to the bailout vote. The metal had lost 16% during the previous five sessions on economic uncertainty.

The market was poised for “a substantial ‘relief rally’ should the House pass the revised proposal,” said Edward Meir, of MF Global.

Any rally in the industrial metals these days is, however, tempered by the general outlook going forward, which is decidedly negative. And analysts are very cognizant of that fact.

For example, Matthew Zeman, a trader at LaSalle Futures Group in Chicago, said that “any gains in copper are going to be fairly limited given the slower-growth atmosphere we have … Until the economic picture turns around, copper cannot move a lot higher.”

Analysts at Barclays Capital in London chipped in by stating that, “This rapid deterioration in macroeconomic conditions has negative repercussions for the demand outlook.”

But Citigroup remains a bit on the optimistic side.

Citi dropped its 2009 copper forecast by 23 percent, but still projected that the red metal will average $3.65 a pound next year. That’s above this year’s average of $3.56.

Citi analysts defended their judgment, writing that, “We regard current conditions to be a severe correction amid a secular bull market.”

Source: Base metals rally modestly -  Bailout has at least that much positive effect