Base metals, except aluminum, close higher

Base metals have closed mostly higher on the London Metal Exchange (LME), finding some support from hopes for further economic stimulus and some short-covering ahead of the weekend.

At the PM kerb close on Friday, LME three-month copper was 1.2 per cent higher at $US7,510 a metric ton. Aluminum lagged the complex, closing 1.1 per cent lower at $US1,933/ton.

Market sentiment was underpinned on Friday by a Reuters report that central banks are prepared for coordinated action to provide liquidity if the election in Greece over the weekend leads to market chaos.

The result of Greece's election Sunday could determine whether the country stays in the euro zone.

Another set of poor US economic data also fuelled expectations that the US Federal Reserve may introduce further monetary stimulus measures.

Manufacturing activity in the New York area slowed sharply in June, while a separate report on US industrial production missed expectations and fell in May.

The data followed worse-than-expected US initial jobless claims figures and a soft May inflation reading Thursday. After the weekend's Greek elections, investors are expected to turn their attention to the US Federal Reserve's policy-setting committee's meeting on June 19-20.

Any indications that a third round of quantitative easing may be on the way would likely strengthen the euro against the dollar, providing support for base metals, which are not only priced in dollars, but are also sensitive to wider economic sentiment.

However, with expectations for further stimulus running high, markets could be disappointed, said industry participants.

"Everyone seems to think QE3 is on the cards right now, and it's getting priced in. If the Fed says nothing about it, the markets will be disappointed," said a London-based broker.