Copper Drops, Paring Quarterly Gain, as Data Stoke Stimulus Bets

Copper declined for the first time in three days, paring the biggest quarterly gain since March 2012, as reports showed the U.S. economy improved, boosting the case that the Federal Reserve may reduce its stimulus.

The metal for delivery in three months on the London Metal Exchange fell as much as 0.3 percent to $7,227 a metric ton and traded at $7,240.25 by 11:04 a.m. in Tokyo. Copper increased 2 percent this month and added 7.3 percent this quarter. Futures for delivery in December sank 0.2 percent to $3.299 a pound on the Comex in New York.

Data today may show spending and sentiment in the U.S. improved. First-time claims for unemployment benefits in the U.S. fell by 5,000 to 305,000 last week, a government report yesterday showed, compared with the 325,000 median forecast in a Bloomberg survey. A tussle between President Barack Obama and congressional Republicans over the budget risks a government shutdown within days.

“The improvement in the U.S. economy will surely trigger concerns over tapering after the Fed unexpectedly kept its stimulus unchanged,” said Xu Liping, an analyst at HNA Topwin Futures Co. in Shanghai.

The Federal Open Market Committee last week unexpectedly refrained from dialing back its $85 billion in monthly bond purchases, saying it was waiting for more signs of sustained economic improvement. Most economists surveyed by Bloomberg on Sept. 18-19, after the FOMC meeting, expect the Fed to wait until a gathering in December to taper purchases.

Metal for delivery in December on the Shanghai Futures Exchange was little changed at 52,340 yuan ($8,548) a ton. Markets in China are closed from Oct. 1 to Oct. 7 for National Day holidays.

On the LME, aluminum, zinc and lead declined, while nickel rose. Tin hadn’t traded.

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