Copper Steady in N.Y., Falls on LME as Dollar Gain Curbs Demand

NEW YORK, Sept. 30 -- Copper prices were little changed in New York and fell on the London Metal Exchange as a stronger dollar curbed demand from investors who buy commodities as a hedge against inflation.

    The U.S. Dollar Index, a gauge of the greenback against six major currencies, rose to the highest level in almost three weeks before paring gains. Some traders buy commodities as the dollar weakens to preserve purchasing power. Copper lost 1.6 percent last week in New York as the dollar climbed 0.5 percent.

    A stronger dollar is "the main reason behind the weaker tone," Edward Meir, an analyst at MF Global Ltd. in Darien, Connecticut, said today in a report. "We suspect the weaker tone will prevail for the next day or two."

    Copper futures for December delivery advanced 0.2 cent to $2.729 a pound on the Comex division of the New York Mercantile Exchange, after dropping as much as 1.5 percent.

    On the LME, copper for delivery in three months dropped $35, or 0.6 percent, to $5,975 a metric ton ($2.71 a pound).

    Prices also dropped on concern that a climb in inventories signals slowing demand. Stockpiles in warehouses monitored by the LME have gained 33 percent since July 10.

    Earlier, copper futures rose as much as 0.8 percent after a report showed home values in 20 U.S. metropolitan areas climbed by the most in almost four years from June to July, signaling the property slump is abating.

    The S&P/Case-Shiller home-price index rose 1.2 percent, the most since October 2005, according to a statement from Standard & Poor's. Builders are the biggest copper users. The metal has surged 94 percent this year, partly on speculation that the economy will rebound.

    "Home prices came in better than people expected, so that's providing a bounce" for copper, said Matthew Zeman, a LaSalle Futures Group trader in Chicago. "Overall, the trend is up. We will see higher copper prices in the next 12 months."

    Among other LME-traded metals, aluminum, nickel, lead, zinc and tin all gained.

    (Source: Bloomberg)