Copper Prices Fall on U.S. Political Worries

By Alistair MacDonald Features Dow Jones Newswires

Copper and other industrial metals sold off Thursday as investors dumped riskier assets amid nerves about U.S. politics.

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Metals were also under pressure as a recent bout of confidence in the Chinese economy fades.

The drop in metal prices, with copper down 1.94% at $55,503 a ton in late morning trade in London, came amid a sell off in equity markets around the world.

Stocks in Europe and Asia declined, and U.S. futures pointed to opening losses. Investors are concerned about President Donald Trump's ability to push through proposals on tax cuts, deregulation and infrastructure spending. Thursday's declines came after U.S. equity markets suffered their worst selloff since September on Wednesday on similar worries.

"It's definitely risk off... the combination of Donald Trump on the one hand and credit concerns in China on the other," said Bjarne Schieldrop, chief commodities analyst at SEB Markets.

Metals prices found little support from data that showed Chinese real-estate prices climbed in April.

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"Our economists believe that prices have peaked," Commerzbank said in a research note. "The continuing slowdown that is anticipated is also likely to dampen economic growth in the next few quarters, and could have a negative impact on metals demand."

Gold gained slightly as the dollar fell and investors looked for havens. The WSJ Dollar Index was down by 0.04%. Metals are priced in dollars, meaning a fall in the greenback makes them cheaper to buy for those who hold other currencies.

Other precious metals were lower, though. Silver was down 0.59% at $16.77 troy ounce, platinum was down 0.99% at $937.70 a troy ounce, and palladium fell 1.79%.

Among other base metals, aluminum was down 1.22% at $1,904.00 a metric ton and nickel jumped 1.04% to $9,030.00 a metric ton.

Write to Alistair MacDonald at alistair.macdonald@wsj.com

Copper and other industrial metals sold off Thursday as investors dumped riskier assets amid the tumult in U.S. politics.

Metals were also under pressure as a recent bout of confidence in the Chinese economy fades.

Copper for July delivery closed down 0.6% at $2.5315 a pound on the Comex division of the New York Mercantile Exchange.

Prices were as low as $2.4845 a pound earlier in the session but rebounded as U.S. stock indexes rallied Thursday. Stocks suffered their worst selloff of the year Wednesday on political uncertainties.

Turmoil in Washington has put President Donald Trump's administration on the defensive and renewed concerns among investors that the White House may struggle to push through proposals on tax cuts, deregulation and infrastructure spending.

"It's definitely risk-off...the combination of Donald Trump on the one hand and credit concerns in China on the other," said Bjarne Schieldrop, chief commodities analyst at SEB Markets.

Metals prices found little support from data that showed Chinese real-estate prices climbed in April.

"Our economists believe that prices have peaked," Commerzbank said in a research note. "The continuing slowdown that is anticipated is also likely to damp economic growth in the next few quarters, and could have a negative impact on metals demand."

Gold prices reversed gains, as the dollar strengthened. Gold for June delivery closed down 0.5% at $1,252.80 a troy ounce.

Metals are priced in dollars, meaning a rise in the greenback makes them more expensive to buy for those who hold other currencies. The Wall Street Journal Dollar Index was recently up 0.4% at 89.24.

July silver was down 1.4% at $16.67 troy ounce, platinum was down 1% at $936.80 a troy ounce, and palladium fell 1.5% to $765.45 a troy ounce.

Among other base metals, aluminum was down 0.1% at $1,923.00 a metric ton. Nickel fell 0.4% to $9,175 a metric ton.

--Ira Iosebashvili contributed to this article.

Write to Alistair MacDonald at alistair.macdonald@wsj.com

(END) Dow Jones Newswires

May 18, 2017 17:30 ET (21:30 GMT)