LONDON: Copper prices were on track for the biggest weekly fall since July on Friday as mixed US jobs data and a stronger dollar added to concerns about global economic growth.
The three-month copper contract on the London Metal Exchange (LME) was down 1.1% to $8,994 a metric ton by 1555 GMT.
The metal hit a session high of $9,175.5 earlier in the day before retreating. It tested resistance at the 200-day and 21-day moving averages at $9,127 and $9,113, respectively, shortly after the closely-watched data showed US employment increased less than expected in August, keeping the Federal Reserve on track to cut interest rates this month.
But the spike was short-lived as an unclear outlook on the size and speed of upcoming interest rate cuts quickly prompted the dollar to regain ground, making dollar-priced metals less attractive for buyers using other currencies.
“While markets are pricing a first Fed rate cut this month, we think more time will need to pass for stronger physical and financial data to emerge and convince investors to meaningfully rebuild positions in metals as a global growth rebound proxy,” Citi analysts said in a note. On a weekly basis, copper is down 2.7% as concerns about global economic growth were inflated by slowing manufacturing activity in China, the top metals consumer.
“We expect manufacturing PMIs to remain weak for the next couple of months, precluding a meaningful imminent metals price rally on cyclical demand recovery prospects,” Citi added. Copper, used in power and construction, has lost 19% since a May rally to a record high of $11,104, buoyed by speculative buying on potential shortages resulting from future demand for electric vehicles and AI data centres.
In other metals, LME tin rose 0.4% to $30,840 a ton and is up 21% this year on tight supply and strong demand from the energy transition, visible in rising semiconductor sales, BofA Securities analysts said. BofA forecasts an average tin price of $37,000 by 2026.
LME aluminium, meanwhile, fell 1.5% to $2,342.50, zinc lost 0.8% to $2,714.50, lead was down 1.7% at $1,962 and nickel slid 1.3% to $15,875.
Comments
Comments are closed.