THE prices of copper in London fell yesterday as investors worried about a looming United States (US) debt default although supply risks due to a strike at the world's top copper mine capped losses.
Reuters reports that the prices for three-month copper on the London Metal Exchange (LME) dropped by half a per cent to $9,625.25 a tonne falling for a fourth straight session.
It has lost more than two per cent since last Wednesday.
The prices for the third month copper on the Shanghai Futures Exchange went down by 0.9 per cent to close at 71,530 yuan per tonne.
At current prices, LME copper is not far off the $9,600 level where it ended 2010 after an early 2011 rally to a record high in mid-February.
But worries about tight global supply have kept in check any decline in the price of the industrial metal in check.
The fears were heightened by industrial action at major copper mines, including Chile's Escondida, the world's biggest copper mine, which entered its fourth day of strike on Monday.
Unable to compromise on how to cut the US budget deficit and raise the country's borrowing authority, US lawmakers are now working on competing bills, heightening the prospects for a catastrophic US debt default.
There were no signs of a deal emerging to avert a default in eight days that could trigger global economic calamity and strip the United States' of its coveted Triple-A credit rating. The U.S. needs to increase its $14.3 trillion US debt ceiling by August 2 2011.
Gold surged to a record high while oil and other commodities fell on Monday
as investors flocked to safer assets with time quickly running out for U.S. lawmakers to reach a debt deal.
The uncertainty lifted gold to above $1,620 an ounce, the fifth record high for bullion in less than two weeks.
Spot gold , which has risen nearly 14 percent so far this year, climbed more than one percent to a record $1,622.49 an ounce, before easing to $1,614.11 by 0540 GMT.
The faltering debt talks also pressured oil prices, with U.S. crude down more than a dollar to as low as $98.74, after hitting a six-week high on Friday.
Brent crude eased 88 cents to $117.79 a barrel. On the domestic scene, the Kwacha settled higher against the US dollar
on Friday closing at its highest level in slightly over a month. The local currency opened on a bullish note at K4, 790 and K4, 810
from Thursday’s close of K4, 905 and K4, 925. Local market was reacting to overnight gains in the euro/dollar
currency pair as the euro-zone debt problem continued to drive major movement in financial markets.
However the kwacha was unable to hold on to gains as it gradually dipped to K4, 800 and K4, 820 where it eventually closed.
According to the ZANACO daily news letter, the local currency which was K5 up on the day was at its highest close since June.
In the short-term the Kwacha is expected to remain firm against the dollar and should trade between K4, 800 and K4, 850.
