Copper lower on decline in US housing starts

Precious metals prices were up Wednesday, but copper declined as the Commerce Department reported that US housing starts dropped by 6.2 percent in August, to the lowest level in over 17 years.

At the same time building permits, which are a gauge of future construction declined even more, dropping 8.9 percent in the month.

The construction industry is the biggest consumer of copper in the United States.

December copper ended the New York session with a decline of 5 cents to $3.04 per pound, while three-month copper was down $110 to $6,760 per tonne on the London Metal Exchange even though LME inventories dropped 1,350 tonnes to 203,975 tonnes.

Meanwhile, gold jumped $70 to $850.50 per troy ounce in New York on demand as a safe place to put money.

Investors are worried that the credit crisis will get worse and more financial groups will go the way of Lehman Brothers (NYSE: LEH), which declared bankruptcy earlier in the week.

Silver had its biggest one-day gain since 1995, adding $1.16 to $11.68 per troy ounce while October platinum gained $17.80 to $1,086.30 per troy ounce.