BLBG:Copper Drops From Two-Week High on Outlook for Fed Stimulus Cut
Copper declined for the first time in four days on concern that the Federal Reserve may start reducing stimulus in coming months amid improving U.S. economic data, reducing the demand outlook for the metal.
The contract for delivery in three months on the London Metal Exchange fell as much as 0.6 percent to $7,051.25 a metric ton and traded at $7,061.50 by 4:19 p.m. in Tokyo. The metal touched $7,133.75 earlier, the highest level since Nov. 12.
U.S. job openings climbed to a five-year high in September, according to data Nov. 22, with a report today projected to show pending home sales rebounded last month. Minutes of the Fed’s October meeting released Nov. 20 showed officials may reduce their $85 billion a month of bond buying if the economy improves as anticipated.
“Signs of an improving U.S. economy will encourage the Fed to cut stimulus sooner,” said Kaname Gokon, deputy manager of research at Okato Shoji Co. in Tokyo.
Further losses in copper prices would be limited as stockpiles declined in Shanghai and London, while geopolitical risks also eased following Iran’s accord with world powers to limit its nuclear program, he said.
Iran agreed yesterday to curtail its nuclear activities in return for easing of some sanctions on oil, auto parts, gold and precious metals. Copper stockpiles monitored by the Shanghai Futures Exchange fell 11 percent last week, the most since December 2011, data showed. Stockpiles monitored by the LME dropped to the lowest since February.
Copper for delivery in February on the Shanghai Futures Exchange closed little changed at 50,500 yuan ($8,288) a ton. The contract for delivery in March slid 0.4 percent to $3.207 a pound on the Comex in New York.
On the LME, aluminum, zinc, nickel, tin and lead also declined.
To contact the reporter on this story: Jae Hur in Tokyo at jhur1@bloomberg.net
To contact the editor responsible for this story: Brett Miller at bmiller30@bloomberg.net
