Dollar Strength Dents Copper's Winning Streak

Jul 30, 2012 (Dow Jones) NEW YORK--Copper futures snapped a three-day winning streak, ending lower Monday, as a stronger dollar and worries about global growth pushed prices lower.

The most actively traded contract, for September delivery, fell 1 cent, or 0.3%, to settle at $3.4160 a pound on the Comex division of the New York Mercantile Exchange.

Copper prices settled lower Monday amid pressure from a stronger dollar, which gained against the euro. The Wall Street Journal Dollar Index was recently up 0.2% at 71.829.

"Look for the theme of currencies leading metal market prices with increased volatility as the week progresses," said traders at RBC Capital Markets, in a note to clients.

Investors continued to wait for policy decisions from the Federal Reserve and the European Central Bank later this week, with markets hoping to see fresh stimulus measures.

Copper prices would likely rally on such announcements, as the metal is used in a broad range of industrial, manufacturing and construction applications and demand would likely tick higher.

"The possibility of further quantitative easing by the Fed coupled with noteworthy short positioning being in place at the moment in commodities are additional potential contributors, to what we forecast to be a healthy Q4 price recovery," said analysts at the Royal Bank of Scotland in a note to clients.

Elsewhere, copper output in Chile, the world's largest copper producer, rose 5.6% year-on-year in June to 452.690 metric tons, the government statistics agency said. Chile produced 2,644,272 tons of copper in the first six months of 2012, up 2.5% from the same period of 2011.

Copper settlements (ranges include electronic and pit trading):
Aug $3.4150; down 1.10 cents; Range $3.4100-$3.4235
Sep $3.4160; down 1.00 cents; Range $3.4025-$3.4555