Copper Futures Decline, Capping Weekly Drop on Slowing Outlook for Growth
Copper prices fell, capping the first weekly decline since mid-July, on concern that slowing economic growth will curb demand for the metal used in pipes and wires.
The Federal Reserve said this week the pace of the U.S. recovery is likely to be “more modest” than forecast. A Commerce Department report today showed that retail sales rose less than predicted in July, boosting concern that tightfisted consumers will prolong the slowdown.
“A lot of people are starting to question the outlook, and it’s looking like it will take a little bit longer to get the economy back on pace,” said Adam Klopfenstein, a senior market strategist at Lind-Waldock, a broker in Chicago.
Copper futures for December delivery fell 3.3 cents, or 1 percent, to close at $3.2725 a pound at 1:16 p.m. on the Comex in New York. That leaves the metal down 2.7 percent this week, the first such drop in four weeks.
Prices also fell as a stronger dollar reduced demand for commodities as an alternative investment. The greenback headed for a fifth straight gain against a basket of six major currencies.
“I don’t see much else influencing prices today” aside from movement in the dollar, said Kevin Tuohy, a metals trader at MF Global U.K. Ltd. in London.
Copper for delivery in three months fell $99 or 1.4 percent, to $7,156 a metric ton ($3.25 a pound) on the London Metal Exchange.
Aluminum, zinc, lead and nickel prices also dropped. Tin gained.
To contact the reporters on this story: Millie Munshi in New York at mmunshi@bloomberg.net; Chanyaporn Chanjaroen in London at cchanjaroen@bloomberg.net.
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