LONDON: Copper prices in London fell after hitting a two-month high earlier on Thursday as a stronger dollar offset support coming from a sharp reduction in available stocks in warehouses registered with the London Metal Exchange (LME).

Benchmark copper on the LME was down 0.3% at $8,573 a metric ton by 1610 GMT. It had earlier touched its highest since April 21 at $8,867.85 and broken above the 100-day moving average at $8,695.

The US dollar index firmed on risk aversion, making dollar-denominated commodities less attractive to buyers holding other currencies. Brent oil futures dropped by $3.8%.

However, LME inventory for the metal used in power and construction has been low for a while and the big jump in cancelled LME warrants on Thursday has further reduced the amount of available material.

“Things are looking quite tight for copper at the moment,” said Dan Smith, head of research at Amalgamated Metal Trading.

Technical indicators give $8,870 as a price target over the next couple of weeks, Smith said, adding that stocks show that there are people keen to hang on to copper.

In top metals consumer China, copper inventories in warehouses monitored by the Shanghai Futures Exchange fell 1.1% this week.

Chinese markets are closed on Thursday and Friday for the Dragon Boat Festival, but sentiment there has been weighed down by a lack of meaningful economic stimulus that could support growth in demand for metals.

Aluminium fell 0.9% to $2,203, losing a fight with resistance coming from the 21-day moving average at $2,239. Zinc gained 0.4% to $2,424.5 and nickel was down 0.6% to $21,110.

Lead lost 0.8% to $2,155 and tin fell 1.7% to $26,835 after hitting their highest since Jan. 30 and April 19 respectively.