LONDON: Copper slid on Friday as bullish investors shed long positions while the dollar strengthened and top metals consumer China reported more corona virus cases and renewed lockdowns.
Lead, however, soared after the Bloomberg Commodity index said it would include the metal in its benchmark. Three month lead on the London Metal Exchange jumped as much as 8.3% after Bloomberg announced the addition to its commodity index in 2023.
It pared gains to $1,987 a tonne by 1600 GMT, still up 6.5%. Copper and other base metals extended losses after strong US consumer spending data kept the Federal Reserve on track for another big rate hike. LME copper eased 2.8% to $7,550.50 a tonne after touching its highest in nearly three weeks on Wednesday.
“The longs are getting out after being sucked into a false break higher earlier in the week and now the market is waiting for a clear sign of where we’re heading next,” said Ole Hansen, head of commodity strategy at Saxo Bank in Copenhagen. Now that LME copper had broken through support at the 21-day moving average around $7,580, prices would likely extend lower to to $7,350, he said.
“The outlook for recovery in China continues to be postponed, so it extends the period of demand uncertainty,” Hansen added. China on Friday reported a rise in Covid-19 infections while cities from Wuhan in central China to Xining in the northwest have been ramping up Covid-19 curbs.