Copper Drops After U.S. Durable Goods Fall More Than ForecastJoe Richter
Copper fell for the first time in three sessions on concern that a bigger-than-expected drop in U.S. durable-goods orders signals slower demand growth in the country, the world’s second-biggest user of the metal.
Bookings for goods meant to last at least three years tumbled 7.3 percent, the Commerce Department said today in Washington. The median forecast of economists surveyed by Bloomberg called for a 4 percent drop. Orders waned for aircraft and capital goods such as computers and electrical equipment. Copper prices are down 8.9 percent this year.
“The durable-goods number was a big disappointment,” Brian Booth, a senior market strategist at Long Leaf Trading Group in Chicago, said in a telephone interview. “Prices started dropping once traders had a chance to leaf through the report.”
Copper futures for delivery in December declined 0.9 percent to settle at $3.327 a pound at 1:11 p.m. on the Comex in New York. Earlier, the metal touched $3.395, the highest since June 5. Trading was 27 percent below the average for the past 100 days for this time of day, data compiled by Bloomberg showed.
“Volume is generally lighter in August,” Booth said. “You can expect to see more volatility.”
The durable-goods report indicates struggling overseas markets and the effects of federal government spending cuts are lingering and holding back manufacturing, which accounts for about 12 percent of the U.S. economy.
“With the demand for big-ticket items faltering big-time, the prospects for solid growth this quarter grow dimmer,” Joel Naroff, president of Naroff Economic Advisors Inc. in Holland, Pennsylvania said in a note to clients.
The London Metal Exchange is closed today for a bank holiday.
China is the biggest copper consumer.