LONDON: Copper fell on Thursday, giving up some gains from the previous session as rising inventories and subdued demand due to the holiday in top metals consumer China weighed on prices.
Benchmark three-month copper on the London Metal Exchange edged down 0.7 percent to $12,816 a metric tonne as of 1:10 p.m. Saudi time, after a 2.3 percent jump on Wednesday.
The Shanghai Futures Exchange is closed until February 23 for Lunar New Year, with Chinese traders largely out of the market.
“It’s really difficult to read too much into the price action this week,” said Ole Hansen, head of commodity strategy at Saxo Bank. “We need to get China back and see what happens then, both on the speculative and also on the physical demand in the following weeks.”
The dollar dipped but held above its recent lows after minutes from the US Federal Reserve showed policymakers did not seem to be in a rush to cut interest rates and that several were open to hikes if inflation proved sticky.
A weaker US dollar makes greenback-priced metals more affordable for holders of other currencies.
Copper stocks in LME-approved warehouses meanwhile increased by another 925 tonnes to 225,575 tonnes, the highest since March.
While high stocks were weighing on prices, copper was being propped up by technicals, Hansen explained. “Since last August, every time we have come down the 50-day moving average has been giving support,” he said, adding that the support level was currently at $12,670.
In other metals, zinc fell 0.3 percent to $3,342.50 a tonne and aluminum shed 0.7 percent to $3,067, after breaking a four-day losing streak on Wednesday. Lead edged up 0.1 percent to $1,965, nickel nudged up 0.6 percent to $17,375 and tin was up 0.5 percent at $46,120.
