LONDON: Copper drifted lower on Friday as bullish investors shed long positions while the dollar strengthened and top metals consumer China reported more coronavirus cases and renewed lockdowns.
Three-month copper on the London Metal Exchange (LME) declined 1.9% to $7,617 a tonne by 1025 GMT after touching the highest in nearly three weeks on Wednesday.
“The longs are getting out after being sucked into a false break higher earlier in the week and now the market is waiting for a clear sign of where we’re heading next,” said Ole Hansen, head of commodity strategy at Saxo Bank in Copenhagen.
LME copper was finding support at the 21-day moving average around $7,580, a break below which would be likely to send prices down to $7,350, he said.
“The outlook for recovery in China continues to be postponed, so it extends the period of demand uncertainty,” Hansen added.
China on Friday reported a rise in COVID-19 infections while cities from Wuhan in central China to Xining in the northwest have been ramping up COVID-19 curbs.
Copper slips as China’s yuan falls to lowest since 2008
“We have seen COVID-zero policies drowning out positivity from the onshore equities market,” Marex analyst Zenon Ho said in a note.
The most-traded December copper contract on the Shanghai Futures Exchange fell 1% to 62,830 yuan ($8,672.07) a tonne.
Also weighing on the market was a firmer dollar, which makes metals priced in the U.S. currency more expensive for buyers using other currencies.
LME lead bucked the trend on Friday, jumping 4.3% to $1,946 a tonne after the Bloomberg Commodity Index announced it would add the metal in 2023.
In other metals, LME aluminium fell 1% to $2,264.50 a tonne, nickel edged down 0.1% to $22,370, zinc shed 1.8% to $2,888.50 and tin dropped 2.1% to $18,295.
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