Copper is heading for a third straight daily loss as U.S. inflation fuels rate hike bets
Comex copper is 4.5% below its September record as the dollar climbs and a mine labor deal in Chile eases supply worries
Copper prices dropped for the third consecutive day on Thursday as the US inflation data revealed a higher-than-expected increase, sparking concerns about another potential Federal Reserve rate hike. The market also reacted negatively to the decline in Asian chip stocks, which extended to the metals sector, and to the resolution of a strike at Chile's largest copper mine, Escondida.
Comex copper for December delivery dropped 1.2% to $6.5810 a pound, its lowest level in 10 days, falling as low as $6.5245 earlier in the session. The contract is now 4.5% below its record settlement of $6.89, observed on September 9, and is experiencing its third consecutive daily loss. In London, three-month copper declined 0.9% to $14,360 a tonne, its weakest level since October 5.
Cash copper settled at $14,751 on Wednesday, up $116 from the three-month price. The Shanghai Futures Exchange's most-traded contract also lost 1.9% to 108,940 yuan ($16,276) a tonne. Analysts attributed the market's reaction to the combination of easing supply worries and the strong inflation report, which triggered profit-taking.
Moreover, copper was trading below its 50-day moving average, indicating a deteriorating technical outlook.
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