Copper prices shed just over one percent at Monday's close on the London Metal Exchange (LME) as funds reversed earlier buying as producer selling kicked in towards recent 8-1/2-year highs at $3,055, traders said.
Analysts expected trading to remain highly volatile due to thin volumes and growing nervousness over growing geopolitical tensions after the assassination of Hamas leader Sheikh Ahmed Yassin.
Three months copper initially rose to $3,023 a tonne as funds continued to buoy the market, but they subsequently withdrew, causing prices to slide and dragging the rest of the market down.
The metal finished the evening kerb at $2,965, losing $39 from Friday's close at $3,004.
"We were doing well to start with...and then it all went into reverse. Not surprisingly with the assassination of the Hamas leader, people are very nervous. Volatility will be greater as global tensions increase," Standard Bank metal analyst Robin Bhar said.
He said copper's fundamentals remained strong and would underpin the market, but the recent peak at $3,055 looked out of reach for now, he said.
"There are reasons to be a bit more cautious than we have been in the last month or so...but having said all that, the metals could still surprise."
Metals could be influenced by US economic data later in the week, notably the durable goods report due on Wednesday at 1330 GMT.
John Kemp, economist with Sempra Metals, said analysts were sharply divided about the outcome of the data, with a median forecast for new orders to rise 1.7 percent in February after falling 1.8 percent in January.
Individual forecasts ranged from no real improvement (0.4 percent) to a substantial one (+2.5 percent), he said.
"An out-turn at the lower end would confirm suspicions that the surge in manufacturing production in recent months is likely to slow in the second and third quarters," Kemp said in a note.
Tin was the only metal to finish the session in positive territory, but was dragged well below an earlier 14-1/2-year high. Three months finished at $7,910, up $50 but off its peak at $8,025.
Analysts said fund buying had boosted the metal earlier, which was underpinned by tight market conditions.
"LME tin stocks are falling rapidly as a result, and a high level of cancelled warrants will likely ensure the declining inventory persists over the nearer term," Barclays Capital analyst Ingrid Sternby said.
Other metals fell in line with copper. Nickel lost $300 to $13,850.
Aluminium ended at $1,666 from $1,678. Zinc was $12 softer at $1,132, while lead shed $15 to $876.
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