Copper futures dropped the most in two weeks and a gauge of mining companies tumbled as a strengthening dollar and falling crude oil prices dragged down commodities.
The dollar rose for a fourth day against the euro in its longest stretch of gains in more than a month amid increasing speculation that the Federal Reserve is moving closer to raising U.S. interest rates. A stronger dollar makes commodities more expensive for buyers in other currencies. Lower oil prices help reduce production costs, deterring miners from trimming output.
There is “tentative and somewhat defensive price action in the metals as the dollar shows signs of life,” Michael Turek, the head of base metals at BGC Partners Inc. in New York, said in an e-mail.
Copper futures for May delivery slid 2.4 percent to settle at $2.2355 a pound at 1:13 p.m. on the Comex in New York, the biggest decline since March 8. The Bloomberg Americas Mining Index plunged 5.3 percent, with First Quantum Minerals Ltd., Teck Resources Ltd and Freeport-McMoRan Inc. among the worst performers.
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Oil fell as U.S. crude stockpiles climbed to the highest level in more than eight decades as imports surged. Commodities markets remain blighted by oversupply, and challenging market conditions are likely to persist, Simon Collins, head of business development at South32 Ltd., said at a conference in Singapore on Wednesday.
- Copper for delivery in three months slipped 2.3 percent to $4,949.50 a metric ton on the London Metal Exchange. Inventories of the metal decreased for a 24th day on the LME, the longest stretch in two years.
- Aluminum, zinc, nickel and lead retreated in London, while tin advanced.
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