Metals prices drop as dollar strengthens

Base metals prices dropped Wednesday as the US dollar strengthened, making it more expensive for investors using other currencies to buy metals that are sold in dollars.

Prices for copper were pushed lower by the end of a strike in Chile and on concerns that price increases this year will hurt demand from China, where consumption was down by 1.3 percent in January and imports dropped by 19 percent in the first quarter of the year from the same time a year ago.

There was speculation, however, that a threatened strike in Peru could push prices higher again.

In afternoon trade in New York, July copper dropped 4 cents to $3.84 per pound while three-month copper on the London Metal Exchange fell $90 to $8,430 per tonne.

Zinc was down $30 to $2,250 per tonne despite the threat of a strike in Namibia, while aluminium was $49 lower to $2,924 per tonne.

Lead fell $135 to $2,420 per tonne, a decline of more than 5 percent on greater supply and declining demand, while nickel dropped $400 to $28,500 per tonne.

Among precious metals, gold dropped on the stronger dollar and on the possibility that rising inflation could convince the Federal Reserve to raise US interest rates soon.

June gold was $6.70 lower to $871 per troy ounce near the close of floor trade in New York, while July silver was down 15 cents to $16.71 per troy ounce and July platinum dropped 80 cents to $1,969 per troy ounce.