Lead Falls for a Third Day Before U.S. Rates Policy AnnouncementAlex Davis
Lead in London extended losses below a two-year low as investors await interest-rate guidance from the U.S. Federal Reserve while the recovery in the second-biggest metals consumer firms amid signs of a slowdown elsewhere.
The metal dropped as much as 0.4 percent after closing yesterday at the lowest price since August 2012. The Fed will issue a statement at the end of its two-day meeting today. Sixty-eight percent of 56 economists surveyed by Bloomberg News said the policy committee will drop its pledge to keep interest rates near zero for a “considerable time.”
“Commodity prices to remain volatile as the market awaits” a rate decision by the Fed, Australia & New Zealand Banking Group Ltd. analysts wrote in a report today. “Sliding oil prices continue to undermine support for metals on the back of deflationary concerns amid a more fragile global economic backdrop.”
Lead for delivery in three months on the London Metal Exchange slid 0.2 percent to $1,915.75 a metric ton at 3:12 p.m. in Hong Kong. The metal lost 2.4 percent yesterday to close at $1,920 a ton.
Russia’s ruble sank to a record low yesterday as the price of crude slumped to the weakest in five years.
“You’ve got to start factoring in Russia and the ripple effects if that country goes in for a real collapse,” said David Lennox, a resource analyst at Fat Prophets in Sydney. “That will ripple into the Western economies.”
Copper in London dropped 0.2 percent to $6,349.75 a ton. In New York, March futures climbed 0.2 percent to $2.8635 a pound, while the metal for February delivery in Shanghai slipped 0.5 percent to close at 45,640 yuan ($7,367) a ton.
On the LME, tin rose while aluminum, nickel and zinc were little changed.