Copper Drops for First Day in Five on Uncertainty Over Europe
Copper declined for the first time in five days as investors were still uncertain whether European Union leaders will be able to contain the debt crisis, reducing demand prospects for industrial metals.
Three-month copper fell 0.4 percent to $7,537 a metric ton on the London Metal Exchange by 4:05 p.m. in Tokyo after gaining as much as $7,620, the highest price since July 20. The September-delivery contract dropped 0.3 percent to $3.417 a pound on the Comex in New York.
The European Central Bank chief meets with U.S. Treasury Secretary Timothy Geithner in Frankfurt today and is also attempting to win over Bundesbank President Jens Weidmann, a critic of ECB bond purchases. Federal Reserve policy makers meet this week ahead of a jobs report to decide whether additional stimulus is needed to combat a slowdown in the biggest economy.
“People still want to hear what the ECB is actually going to do,” said Nick Trevethan, senior commodities strategist at Australia & New Zealand Banking Group Ltd. “They said their intentions but haven’t said how.”
ECB President Mario Draghi said July 26 that policy makers will do whatever is needed to preserve the euro currency bloc.
“While we don’t have these details or we have some uncertainty over their ability, we could see a little bit of volatility in the market and I don’t think the market necessarily will be comfortable going in a single direction,” Trevethan said.
Copper inventories monitored by the Shanghai Futures Exchange fell for the first time in six weeks, bourse data showed July 27. Stockpiles declined 4,463 tons to 156,510 tons last week from 160,973 tons a week earlier, according to a survey of 10 warehouses in Shanghai, the exchange said.
Copper for November delivery closed little changed at 54,830 yuan ($8,595) a ton on the Shanghai Futures Exchange.
Aluminum, zinc, tin and lead in London declined, while nickel was little changed.
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