Copper prices dropped on Friday and were on track for a weekly fall, as the dollar stayed strong ahead of a key US jobs report later in the day, while zinc pulled back after hitting its highest in more than two weeks in the previous session.
Three-month copper on the London Metal Exchange was down 0.8% at $7,544 a tonne by 0325 GMT, extending losses to a third session.
A chorus of hawkish Federal Reserve speakers buoyed the dollar, along with bets that solid US jobs data will keep the central bank on its aggressive tightening path to tame inflation.
A stronger dollar makes commodities priced in the greenback more expensive for buyers using other currencies. Overnight, several Fed officials reinforced the view that the central bank was nowhere near done with its hiking cycle, fanning worries about a recession that could dampen demand for metals.
“Despite the ongoing supply disruptions, concerns over macro headwinds and recession fears are dominating copper’s sentiment and prices for now,” said ING commodities strategist Ewa Manthey.
Copper pulls back on firmer dollar, zinc gains on Glencore news
Concerns over top consumer China’s economy will also keep the metal under pressure until the government eases its strict COVID-19 restrictions, she said in a note.
With China’s ruling Communist Party holding its once-in-five-years congress beginning Oct. 16, Manthey said there was speculation that the government might start to relax its strict approach to containing the virus.
Zinc shed 1.7% to $3,069 a tonne. It hit its highest since Sept. 20 on Thursday at $3,193, after Glencore said it would place its Nordenham smelter in Germany on care and maintenance from Nov. 1, and the LME restricted new deliveries from a Russian mining company.
Aluminium rose 0.6% to $2,360 a tonne, lead slipped 0.9% to $2,041, and tin lost 0.6% to $20,045.
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