Copper futures slumped to a four-week low as signs of an improving U.S. economy increased speculation the Federal Reserve will start slowing stimulus.
The Institute for Supply Management’s non-manufacturing index last month climbed at the fastest pace since at least January 2008, the Tempe, Arizona-based group said today. The Fed will probably decide to lower its $85 billion in monthly bond purchases this month, according to 65 percent of economists surveyed by Bloomberg Aug. 9-13.
“Tapering is a big concern for emerging markets in particular,” Bart Melek, the head of commodity strategy at TD Securities in Toronto, said in a telephone interview. “That’s a big source of demand for copper.”
Copper futures for delivery in December dropped 0.3 percent to $3.2315 a pound by 11:41 a.m. on the Comex in New York, after falling to $3.22, the lowest for a most-active contract since Aug. 8.
On the London Metal Exchange, copper for delivery in three months declined 0.3 percent to $7,104.75 a metric ton ($3.22 a pound).