LONDON: Copper prices fell on Thursday to their lowest in more than three weeks as funds exited industrial metals and switched to gold to reduce exposure to China’s struggling economy.
Three-month copper on the London Metal Exchange (LME) fell 1.1% to $9,455 per metric ton by 0945 GMT. The contract hit as low as $9,435.5 earlier in the session, a level unseen since Sept. 23.
“More investors are becoming risk-off and decided to put their money somewhere else,” said Tom Price, managing director with Panmure Liberum.
He said the asset switch was apparent as prices of copper and iron ore, which are closely connected to Chinese economy, came under pressure this month, meanwhile a rally in gold prices continued.
Spot gold prices set all-time highs on Thursday.
The pessimism towards China, the top metals consumer, remained after a lack of fresh stimulus from a closely-watched housing policy briefing on Thursday left some investors disappointed to send China and Hong Kong stocks lower.
Copper hits three-week low on confusion over China stimulus
The property sector accounts for a large portion of industrial metals demand.
“There were many big announcements but nothing happened,” said Price.
On Friday, China will release major economic indicators such as third-quarter economic output, retail sales and home prices.
Its property sector accounts for a large portion of industrial metals demand.
The dollar hovering near an 11-week high also made metals expensive for holders of other currencies and weighed on their prices.
LME aluminium declined 0.9% to $2,561 a ton, nickel dropped 1.8% to $16,965, zinc shed 1.9% to $2,993.5, lead eased 0.6% to $2,072, and tin lost 2.6% to $31,300.
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