Copper futures fell the most in a week, before minutes from the Federal Reserve’s last meeting showed policy makers were split on whether they would raise interest rates in June.
“Several participants judged that the economic data and outlook were likely to warrant beginning normalization at the June meeting,” according to the record of the March 17-18 Federal Open Market Committee session released Wednesday in Washington. The dollar erased losses after the report, curbing the appeal of commodities as alternative assets.
Given that “we saw some Fed members favor a June tightening, that mentality would be expected to support the dollar and pressure metals,” David Meger, the director of metals trading at High Ridge Futures in Chicago, said in a telephone interview. “A sooner-than-anticipated rate hike would pressure commodities across the board.”
Copper futures for May delivery declined 1.1 percent to settle at $2.7315 a pound at 1:25 p.m. on the Comex in New York, before the minutes were released. The drop was the biggest for a most-active contract since March 31. Futures extended losses in electronic trading after the Fed report.
On the LME, copper for delivery in three months declined 0.9 percent to $6,010 a metric ton ($2.73 a pound).
Lead rose 0.9 percent after stockpiles in warehouses tracked by the LME fell 3.3 percent, the most since Nov. 18, 2008.
Aluminum and tin dropped in London, while nickel and zinc climbed.