Copper futures fell, snapping the longest rally in nine months, after Goldman Sachs Group Inc. said surpluses will weigh on mined commodities and Caterpillar Inc. reported disappointing earnings.
Goldman Sachs pared estimates on prices of industrial metals including nickel, lead and zinc, and said copper’s surplus may almost double in two years. Caterpillar, the world’s largest manufacturer of mining and construction equipment, cut its earnings forecast and posted profit that trailed analysts’ estimates for a third straight quarter. The Standard & Poor’s 500 Index dropped as much as 0.6 percent.
“There’s been a pullback in equity markets as investors digest earnings news, and the Caterpillar report isn’t helping copper,” Adam Klopfenstein, a senior market strategist at Archer Financial Inc. in Chicago, said in a telephone interview. “Copper is on the defensive.”
Copper futures for delivery in September lost 0.6 percent to settle at $3.179 a pound at 1:15 p.m. on the Comex in New York. Earlier, the price touched $3.234, the highest since June 17. The metal climbed in the previous four sessions, the longest rally since early October.
Mining-equipment sales declined on slower commodity demand from emerging markets, Peoria, Illinois-based Caterpillar said.
Copper also fell as Treasury yields and the dollar climbed, reducing the appeal of the metal as an alternative asset. The yield on 10-year Treasuries jumped eight basis points to 2.59 percent at 3:06 p.m. in New York.
“As 10-year yields went up, commodities came off, and the Goldman report added to the pressure on industrial metals,” Carlos Perez-Santalla, a New York-based broker at Marex North America LLC, said in a telephone interview.
Copper for delivery in three months on the London Metal Exchange rose 0.2 percent to $7,055 a metric ton ($3.20 a pound). Aluminum, lead, nickel and tin also gained in London, while zinc was lower.