Metals prices fall despite declines in inventories

After gains early in the day, metals prices were lower on Tuesday. Gold was 0.3 percent lower to $648.50 per troy ounce on new production data. Output was up by 25.7 percent in January, but more established producers saw output decline. South Africa saw production decline by 8.9 percent in January, compared to the same period last year. Australia’s output was 5.3 percent lower last year as it produced 249 tonnes of gold, and Peru’s output is expected to drop by 12 percent this year to 178 tonnes.

In base metals, all inventories in London Metal Exchange warehouses was down on the day with the exception of zinc. Still, prices were lower. Nickel dropped 0.1 percent to $43,750 per tonne after rising to another record high of $44,650 per tonne earlier, and traders said that the price could go as high as $50,000 per tonne if western Australian supplies are disrupted due to bad weather. Copper was 0.7 percent lower to $6,220 per tonne. The price of zinc fell 2 percent to $3,225 per tonne.