Copper declined to the lowest level in almost two weeks on speculation that quickening U.S. growth this year may increase the odds for the Federal Reserve to accelerate its tapering of stimulus.
The contract for delivery in three months on the London Metal Exchange fell as much as 0.4 percent to $7,286 a metric ton, reversing an earlier gain of as much as 0.5 percent. Futures traded at $7,289.25 at 4:28 p.m. Shanghai time. The metal lost 0.9 percent last week after touching $7,460 on Jan. 2, the highest price since June 5.
U.S. economic growth will accelerate this year even as the pace of expansion remains sub-par almost five years after the end of the recession, according to academic economists and former policy makers. The dollar reached the strongest against the euro in a month before U.S. services and factory data today that may bolster the case for the Fed to end its bond-buying program this year.
“The market is worried about copper demand as further reductions are expected to be considered at coming Fed meetings on the bullish outlook for the U.S. economy,” said Sijin Cheng, an analyst with Barclay Plc in Singapore.
Copper for delivery in March closed 0.3 percent lower at 51,770 yuan ($8,552) a ton on the Shanghai Futures Exchange. The contract for delivery in March decreased 0.6 percent to $3.336-a pound in New York.
On the LME, nickel fell as much as 1.4 percent to $13,651 a ton, the lowest price since Dec. 5. Aluminum, tin, lead and zinc also dropped.