Stronger dollar and new COVID-19 cases drag metals lower
- Investors fretting about the impact of a sharp rise in cases in Europe kept the dollar near two-month highs.
- Three-month copper on the London Metal Exchange was down 0.8% at $6,551 a tonne at 1650 GMT after touching its lowest since Aug. 18.
LONDON: Copper fell to a one-month low on Thursday as the US dollar strengthened, sapping demand for commodities priced in the currency and on concerns that fresh cases of coronavirus could hamper global economic recovery.
Investors fretting about the impact of a sharp rise in cases in Europe kept the dollar near two-month highs.
Three-month copper on the London Metal Exchange was down 0.8% at $6,551 a tonne at 1650 GMT after touching its lowest since Aug. 18.
"The stronger dollar is not helping commodities. Metals are taking their cues from the falling stock markets," said independent analyst Robin Bhar.
A stronger US currency makes dollar-priced metals more expensive for holders of other currencies, which can lower demand.
"But I see this as a healthy correction... nothing goes up in a straight line forever so this is a good buying opportunity. The fundamentals for copper are pretty solid," Bhar said.
An economic recovery from the coronavirus pandemic, speculative buying and supply disruptions have pushed copper up 50% since a March low. On Monday, it touched its highest since June 2018 at $6,877.50.
INVENTORIES: The premium for cash copper over the three-month contract has fallen to $3,75 from $40 a week ago, despite low stocks of copper in LME-registered warehouses.
On-warrant copper stocks are at 28,825 tonnes, their lowest since March 2019 and down about 90% since May.
SUPPLY: Global copper smelting activity recovered in August, mainly due to a jump in activity in North America, data from satellite surveillance of copper plants showed.
NICKEL: The global nickel market surplus narrowed to 8,900 tonnes in July from an upwardly revised 14,700 tonnes the previous month, the International Nickel Study Group said on Wednesday.
TIN: Tin prices are due to extend their rally next year as top consumer China stocks up on the metal due to a recovery in demand for electronic goods.
ECONOMY: The number of Americans filing new claims for unemployment benefit unexpectedly increased last week.
PRICES: Aluminium eased 0.4% to $1,748 a tonne, zinc shed 0.4% to $2,394, lead was down 0.8% at $1,863, tin dropped 2.3% to $17,435 while nickel fell 0.6% to $14,345.
Comments
Comments are closed.