Sep 28 (Bloomberg) -- Copper prices fell from a five- month high on speculation that tepid economic growth signals slack metal demand.
Reports last week indicated that the U.S. housing market remains depressed and unemployment may continue to stifle the recovery. Copper probably needs positive economic news to extend the rally, Citigroup Inc. in London said today in a report.
"Copper is a little overbought,” said Matthew Zeman, a metal trader at LaSalle Futures Group in Chicago. "It’s teetering around the top of the range, so to see a pullback is not surprising.”
Copper futures for December delivery fell 2.1 cents, or 0.6 percent, to settle at $3.597 a pound at 1:24 p.m. on the Comex in New York. Earlier, the metal reached $3.644, the highest level for a most-active contract since April 12.
On the London Metal Exchange, copper for delivery in three months fell $35, or 0.4 percent, to $7,910 a metric ton ($3.59 a pound).
On Sept. 24, the price reached $7,990, the highest level since April. 15.
"Some dramatically good economic news” may send copper above the "historic resistance level” of $8,000, Citigroup said. The chances of that are 25 percent, the same odds for a potential "sharp” decline in inventories, the bank said."It is likely that copper will at best ‘pause’ for a while,” Citigroup said.
Aluminum, zinc and lead also fell on the LME. Nickel and tin gained.