Copper fell from the highest in more than seven months in London as a rebound in the dollar dragged commodities lower and some investors said gains were too rapid. The U.S. Dollar Index, a gauge of the greenback against six major currencies, rose as much as 0.4 percent, the first advance in four days. A stronger dollar makes commodities priced in the currency more expensive for investors holding euros and pounds. “The upward move in prices during the last few days has been phenomenal,” Alex Heath, head of industrial metals trading at RBC Capital Markets in London, said by phone today. “People question the speed of the recovery.” Three-month delivery copper on the London Metal Exchange fell $70, or 1.4 percent, to $5,005 a metric ton by 9:29 a.m. in London, after earlier rising to $5,145 a ton, the highest since Oct. 15. Copper futures for July dropped 1.2 percent to $2.291 a pound on the New York Mercantile Exchange’s Comex division. China’s Purchasing Managers’ Index came in yesterday at 53.1 in May, the third straight reading of more than 50, which indicates expansion, the Federation of Logistics and Purchasing said. The country is the world’s largest consumer of copper. Stockpiles of copper in warehouses monitored by the LME slid for an 18th straight session to 309,225 tons, the lowest since Dec. 12. Inventories have declined 44 percent from a high this year on Feb. 25 as China bought metal to increase reserves. Among other LME metals for three-month delivery, aluminum rose 0.4 percent to $1,479 a ton, while nickel fell $135 to $14,515, tin was unchanged at $14,650, lead sank 1.6 percent to $1,634 and zinc shed $27 to $1,583 a ton.

Source