Copper prices lower on China news, US housing starts

Copper prices fell Wednesday on the news that China is moving to limit the amount of credit available in the country in order to make sure that inflation does not spiral out of control.

Despite some analyst predictions that demand for the metal used in construction and manufacturing will remain strong, the new reports have spurred concern that demand will fall.

Also hurting copper prices was the news that US housing starts dropped by 4 percent in December, from November levels.

March copper was down 9 cents to $3.36 per pound in New York trade, while three-month copper dropped $145 to $7,387.50 per tonne on the London Metal Exchange.

Other base metals prices also fell in London as aluminium fell $29 to $2,257.50 per tonne, zinc was down $61 to $2,441.50 per tonne, lead was $86 lower to $2,386.50 per tonne, tin fell $137.50 to $17,775 per tonne and nickel dropped $410 to $18,802.50 per tonne.

Precious metals prices were also lower as gold was hurt as worries over the economic situation in China damaged gold’s appeal as a hedge against inflation, and as the euro weakened against the US dollar.

February gold was down $27.40 to $1,112.60 per troy ounce in New York, while March silver was 92 cents lower to $17.88 per troy ounce and April platinum fell $19.60 to $1,619.80 per troy ounce on profit-taking, but not before going as high as $1,654.70 per troy ounce earlier.

In mid-morning trade, palladium had dropped $7.45 to $454.50 per troy ounce.