Copper fell to a six-week low on Friday, ignoring the often supportive influence of a weaker dollar, as technical pressures mounted and US data offered further evidence of slowing economic conditions. Copper's losses diverged from US industrial share prices, which were buoyed by a fivefold increase in quarterly profits from heavy machinery manufacturer Caterpillar Inc.
Instead, prices crumbled under a negative price chart picture after the front-month May contract broke down below key trendline support around $4.20 per lb. The most-active July COMEX copper contract slumped to a session low of $4.1580 per lb, its lowest level since March 15, before ending the day at $4.1790, down 8.25 cents from Thursday's close.
It was the second consecutive monthly loss for the metal as concerns about rising inflation and further rounds of interest rate hikes in Asia, Europe and Latin America underscored perceptions of lower demand for raw materials at the start of the year. Copper was down overnight after data showed inflation pressures on the rise in the eurozone, upping the chances of an interest rate increase in June.
Stocks in Shanghai's bonded warehouses were hovering at around 650,000 tonnes, equivalent to roughly four weeks of China's domestic use and higher than the 200,000-tonne average over the past three years. The London Metal Exchange (LME) copper three-month delivery contract was closed Friday for Britain's royal wedding, and will remain shut on Monday for a public holiday. Shanghai will also be shut on Monday.