LONDON — Copper hit its lowest in over a month on Thursday as investors sought safety in the dollar due to rising coronavirus cases and lockdowns in large economies, pressuring metals priced in the greenback.
Benchmark three-month copper on the London Metal Exchange (LME) fell 0.7% to $7,765 a tonne by 1134 GMT, its lowest since Dec 23.
The prospects for higher demand from top consumer China and vaccine optimism had pushed copper prices to their highest in nearly eight years earlier this month.
But the rally has started to lose momentum as logistical issues dented hopes for a speedy recovery in the global economy.
“The recent move lower in the copper price probably reflects the general risk-off sentiment in risky assets such as equities, which we think is in part motivated by growing concerns about COVID-19 lockdowns in China and Europe,” said Capital Economics analyst James O’Rourke.
DOLLAR: Investors piled into the greenback, making dollar-denominated assets more expensive for holders of other currencies.
INVENTORIES: Copper stocks in warehouses certified by the LME are at their lowest since September at 76,350 tonnes. Stocks in warehouses registered with the Shanghai Futures Exchange are at their lowest since 2011 while Comex inventories are also slipping.