Copper (COMEX:HG) fell the most in five weeks in New York as signs of slowing economic growth in Europe fueled demand concerns.
Gross domestic product in the 18-nation currency bloc rose 0.2 percent last quarter, down from a revised 0.3 percent gain in the previous three months, the European Union’s statistics office said today. European Central Bank policy makers meet tomorrow to decide on stimulus and interest rates as they try to rekindle the economy and prevent deflation. Copper has dropped 8.9 percent this year amid global growth concerns.
“Deflationary expectations could possibly reverberate from this European situation,” Adam Klopfenstein, a senior market strategist at Archer Financial Services in Chicago, said in a telephone interview. “The market is embracing that phenomenon.”
Copper futures for delivery in July slid 1.4 percent to settle at $3.093 a pound at 1:19 p.m. on the Comex in New York, the biggest slump since April 30. On the London Metal Exchange, copper for delivery in three months fell 1.2 percent to $6,785 a metric ton ($3.08 a pound).
Of 50 economists surveyed by Bloomberg News, 44 expect the Frankfurt-based ECB to become the first major central bank to take interest rates into negative territory. The ECB will announce its rate decision at 1:45 p.m. in Frankfurt tomorrow.
Copper fell 1.1 percent yesterday in New York on signals that factory demand will ease in China, the world’s largest consumer of industrial metal.
Orders to remove the metal from warehouses monitored by the LME declined for a seventh session, to 70,525 tons.
Aluminum, zinc, nickel, lead and tin slid in London.