Copper declined for the first time in eight days as investors await the outcome of the U.S. Federal Reserve’s two-day meeting starting today amid speculation that the central bank will cut stimulus.
The contract for delivery in three months on the London Metal Exchange dropped 0.2 percent to $7,278 a metric ton at 4:05 p.m. in Tokyo. The price touched $7,307.70 yesterday, the highest intra-day level since Oct. 23. The metal is down 8.2 percent this year.
The Fed may start reducing its $85 billion of monthly bond purchases at the Dec. 17-18 meeting, according to 34 percent of economists surveyed on Dec. 6 by Bloomberg, up from 17 percent in a Nov. 8 poll. The U.S. and euro region are due to release data on inflation today.
“Investors will take wait-and-see stances until they see the outcome of the Fed meeting,” said Hiroyuki Kikukawa, the general manager of research at Nihon Unicom Inc. in Tokyo.
Falling inventories would limit losses in copper, he said. Stockpiles tracked by exchanges in London, New York and Shanghai tumbled 24 percent since the end of September and are at a one-year low. The premium for immediate-delivery copper over the contract for delivery in three months on the LME widened to the biggest since May 2012 yesterday. The so-called backwardation signals limited supplies.
Copper for delivery in February on the Shanghai Futures Exchange closed little changed at 51,450 yuan ($8,474) a ton. Futures for delivery in March lost 0.2 percent to $3.3245 a pound on the Comex in New York.
On the LME, tin and zinc also dropped, while nickel and lead rose. Aluminum was little changed.
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