Copper Prices Slide Most in Week on Low U.S. InflationJoe Deaux
Copper futures dropped the most in a week as signs of low U.S. inflation cut demand for commodities as a store of value.
The cost of living declined 0.2 percent in August, the first decrease since April 2013, Labor Department data showed today. The Bloomberg Commodity Index of 22 raw materials fell for the first time in three days.
“With low inflation rates, you’re not going to see copper take off to the upside,” Adam Klopfenstein, a senior market strategist at Archer Financial Services in Chicago, said in a telephone interview. “In a deflationary environment or a low-inflation environment, the interest in owning commodities diminishes,” he said in an e-mail.
Copper futures for December delivery fell 0.7 percent to settle at $3.1435 a pound at 1:11 p.m. on the Comex in New York, the biggest drop for a most-active contract since Sept. 9.
Prices yesterday jumped the most in 13 months, triggering a brief trading halt, as a report on increased government stimulus measures boosted prospects for demand in China, the world’s top metal user.
On the London Metal Exchange, copper for delivery in three months climbed 0.4 percent to $6,931 a metric ton ($3.14 a pound). Yesterday, an index of the six main metals traded on the LME had the biggest gain in almost four weeks.
Nickel, aluminum, lead, zinc and tin dropped in London today.
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