Copper prices dropped the most in two weeks after pending sales of U.S. homes unexpectedly fell in June and factory orders declined more than forecast, signaling metal demand may ebb.
Equities slid on the economic data. U.S. consumer spending also stagnated after analysts forecast a gain. Yesterday, copper climbed to the highest price since April 29, gaining for the 10th time in 11 sessions. The 14-day relative-strength index reached 73, indicating the metal may be poised to drop.
“Prices cannot sustain this kind of upward momentum without cooling off,” said Donald Selkin, the chief market strategist at National Securities Corp. in New York. “The market is using falling stocks as an excuse to take a little breather.”
Copper futures for September delivery dropped 3.1 cents, or 0.9 percent, to close at $3.3585 a pound at 1 p.m. on the Comex in New York, the biggest loss for a most-active contract since July 16. The metal climbed as high as $3.3965 yesterday.
Prices will drop for a few days to “allow profit-taking and new buyers to come in,” Selkin said. Copper has support at $3.20, he said.
Copper has climbed 23 percent in the past year as supplies tightened.
On the London Metal Exchange, copper for delivery in three months fell $85, or 1.1 percent, to $7,425 a metric ton ($3.37 a pound).
Aluminum, zinc, nickel and tin also slipped in London. Lead gained.