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Copper Seen Falling as Monti’s Warning Adds to Growth Concerns

Monday, 06 Aug 2012 05:26 PM

Aug. 6 (Bloomberg) -- Copper may fall in London, extending last week’s drop, as a warning by Italian Prime Minister Mario Monti that policy disagreements are undermining the European Union added to concerns about the region’s economic growth.

European stocks dropped and the euro erased gains after Monti told Germany’s Der Spiegel magazine that tensions within the 17-nation shared currency area are “showing signs of a psychological dissolution of Europe.” Copper retreated after rallying the most in three weeks on Aug. 3 as U.S. payrolls climbed more than forecast in July.

Monti’s comments “probably sent a bit of a reality check back into the market and the euro has weakened a bit this morning as a consequence,” Ole Hansen, head of commodity strategy at Saxo Bank A/S in Copenhagen, said by e-mail today. “Short-term copper is under a bit of pressure this a.m. as the dollar is rising and demand remains low.”

Copper for three-month delivery was little changed at $7,441 a metric ton by 10:07 a.m. on the London Metal Exchange, after dropping as much as 0.8 percent earlier today. The metal declined 1.6 percent last week as the European Central Bank and the Federal Reserve refrained from announcing further stimulus. Copper for September delivery was little changed at $3.368 a pound on the Comex in New York.

The euro slid as much as 0.4 percent to $1.2342. A stronger dollar saps demand for commodities as an alternative investment and makes metals priced in greenbacks more expensive in terms of users of other currencies.

Money managers cut their net short positions to 6,664 futures and options on the Comex in the week ended July 31, according to U.S. Commodity Futures Trading Commission.

Copper stockpiles monitored by the LME rose for the first session in six, climbing 0.5 percent to 245,950 tons, exchange data showed today. Orders to draw the metal from LME warehouses fell 3.8 percent to 45,025 tons.

Aluminum, lead, zinc and tin fell in London, while nickel rose.

--Editor: John Deane

To contact the reporter on this story: Agnieszka Troszkiewicz in London at atroszkiewic@bloomberg.net

To contact the editor responsible for this story: Claudia Carpenter at ccarpenter2@bloomberg.net

© Copyright 2017 Bloomberg News. All rights reserved.

 
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2012-26-06
Monday, 06 Aug 2012 05:26 PM
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