COMEX copper futures plunged more than 6 percent by mid-session on Wednesday, punished for the second straight session by a stronger US dollar and traders cashing in after the recent rally in base metals.
Benchmark May copper on the COMEX division of the New York Mercantile Exchange fell 8.70 cents to $1.2890 a lb at 12:12 pm EST (1712 GMT), near the bottom of a $1.3760-$1.2750 range.
Traders said copper was ripe for profit taking after rallying to an 8-1/4 year peak near $1.40 a lb on Monday, thanks to strong demand in Asia and steadily falling warehouse inventories.
"It's a combination of fund liquidation and stop-loss selling," said a floor trader. "We gapped lower at the open and never looked back, and the stronger dollar has to help the selling."
A surge in the dollar was exacerbating selling in dollar-priced base and precious metals this week, dealers said, as material has become costlier overseas for traders holding foreign currencies.
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