Aug. 23 (Bloomberg) -- Copper futures rose for a second day in New York on a drop in inventories and speculation that the Federal Reserve may hold off on curbing U.S. stimulus in September.
Stockpiles tracked by the London Metal Exchange fell 3.4 percent this week, the most since September. Purchases of new U.S. homes plunged in July by the most in more than three years, government data today showed. Signs of a slowdown may prompt the Fed to delay cutting $85 billion in monthly asset purchases aimed at spurring economic growth.
“Inventories have been falling, and that’s giving some support to copper,” Carlos Perez-Santalla, a New York-based broker at Marex North America LLC, said in a telephone interview. “With the weak new-home-sales figures, there’s now some doubt in the market that tapering will happen next month.”
Copper futures for delivery in December rose 0.6 percent to settle at $3.356 a pound at 1:11 p.m. on the Comex in New York. The metal fell 0.3 percent this week. On the LME, the metal for delivery in three months added 0.5 percent to $7,360 a metric ton ($3.34 a pound).
LME copper inventories slid for a 28th session, the longest stretch since February 2012, to 564,225 tons.
Gains in copper futures may be limited amid concern that liquidity is tightening in China, the world’s largest user of the metal. The nation’s benchmark money-market rate posted its largest weekly gain in a month on concern the cash supply will tighten as banks cover month-end obligations.
“The underlying data in China is not bad, but it doesn’t suggest surging demand,” David Wilson, an analyst at Citigroup Inc. in London, said by telephone.
Aluminum, lead, nickel and zinc advanced in London. Tin declined.
-_With assistance from Agnieszka Troszkiewicz in London. Editors:
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