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Copper falls on tumbling crude oil, profit-taking
NEW YORK/LONDON |
NEW YORK/LONDON (Reuters) - Copper fell on Monday as tumbling crude oil prices prompted investors to take profits after a new round of U.S. monetary stimulus sent the industrial metal to a 4-1/2-month high in the previous session.
Some investors expressed caution over the prospects for prolonged growth in industrial metals due to a 3 percent slide in Brent oil, slowing activity in China, and worries the central bank measures will take time to feed through to the economy.
Copper, often seen as a barometer of global economic strength, gained 5 percent last week - its biggest jump in 11 weeks - after the Federal Reserve said it would pump $40 billion into the U.S. economy every month until it sees a sustained upturn in the weak jobs market.
On Monday, LME copper prices notched their biggest daily drop in a month as financial markets fell across the board on profit-taking after last week's gain boosted by hopes that the Fed stimulus will boost U.S. economic growth.
Three-month copper on the London Metal Exchange closed down 1 percent at $8,302 per metric ton, after touching a high of $8,386.25 - near the 4-1/2-month top of $8,411 hit in the previous session.
LME copper rose 3.8 percent on Friday, its largest daily percentage gain since June 29, and is up nearly 10 percent on the year.
U.S. COMEX copper futures for December delivery settled down 4.05 cents, or 1.1 percent, at $3.792 a lb.
HEDGE FUNDS BET ON COPPER
Hedge funds and other big speculators pumped more than $6 billion into U.S. commodity markets last week, the most in three weeks, just before the Fed announced its new round of stimulus, trade data showed on Friday.
Capping some of the metals' gains were worries about China's property market, a top user of metals for construction but also for collateral as developers use imports to get cheaper credit.
Factory activity will return to the fore this week with a series of industrial-sector reports around the world, led by Thursday's euro zone PMI data.
In other metals, aluminum closed at $2,167 a metric ton, from $2,195 on Friday.
Tin closed at $21,575 a metric ton, having hit its highest since early May at $21,750. It closed at $21,675 on Friday. Zinc, used in galvanizing, closed at $2,089 from $2,116.
Battery material lead, untraded at the close, was bid at $2,257 from $2,265 on Friday, while stainless steel ingredient nickel ended at $18,220 from $17,775.
(Additional reporting by Melanie Burton in Singapore; Editing by Dale Hudson)
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