Copper ends on a weak mode

Prices continue to drop due to economic concerns

Copper prices ended lower at Comex on Monday, 19 April 2010. Though prices recovered from intra day lows, negative news regarding Goldman Sachs continued to weigh on commodities during the whole day. The strong dollar added further woes. Stronger than expected economic data helped lift prices also.

At USA, copper futures for July delivery ended lower by 1.75 cents (0.5%) at $3.518 a pound on Monday. During intra day trading, prices fell to a low of $3.4725. Last week, prices lost 1.5%. In March, copper gained 7.5%. Copper gained about 6% for the first quarter, buoyed by data from the U.S. and other countries reinforced expectations that the global economic recovery was on track. On a year to date basis, in 2010, copper is higher by 4.1%.

Prices have increased by almost 67% in the past twelve months due to higher imports from China. Copper ended FY 2009 higher by 140%.

On Monday, at LME, copper for delivery in three months ended lower by $65 (0.8%) at $7,695. Prices had crossed the $8,000 mark for first time since 2008 last Tuesday, 6 April. On 3 July, 2008, prices had touched an all time intra day high of $8,940.

Wall Street was stunned on Friday after news hit the wires that the U.S. Securities and Exchange Commission has filed a civil suit accusing Goldman Sachs and one of its vice presidents of defrauding investors in connection with a mortgage derivative. As per reports, a key focus of these worries may be Paulson & Co., which is enmeshed in a SEC lawsuit against Goldman Sachs but hasn't been charged. The hedge fund giant is one of the world's biggest investors in gold. If Paulson investors try to redeem from the firm's hedge funds, the firm might be forced to unwind some of its gold positions, pressuring prices.

In the currency market on Monday, the dollar index, which measures the strength of the dollar against basket of six other currencies rose by 0.13%.

Among economic reports for the day, The Conference Board on Monday said the slow economic recovery should continue over the next few months, which also helped several commodities pare some of its losses. The index of leading economic indicators rose 1.4% in March, marking 12 consecutive gains, following an upwardly revised increase of 0.4% in February.

Copper ended substantially higher last year on expectations of revived global economic growth along with a decline in the dollar. The dollar index had dropped almost 4.2% last year. The metal was also pushed higher by record first-half imports to China, the world's largest user.

The U.S. buys about 13% of the 17 million metric tons of copper sold annually and China buys about 20%.

At the MCX, copper for April delivery closed lower by Rs 1.3 (0.37%) at Rs 344.8/Kg. Prices rose to a high of Rs 345.9/Kg and fell to a low of Rs 340.2/Kg during the day's trading.

Among other metals traded in the LME on Monday, lead ended 5.2% lower at $2,240 a ton and zinc ended 3.8% lower at $2,400 a ton. Nickel ended 0.4% higher at $26,925. Aluminum ended 2.9% lower at $2,394 a ton.