Stronger Dollar Hurts Copper -- Update

By David Hodari and Amrith Ramkumar

Copper prices fell for the 12th time in the past 15 sessions on Wednesday, continuing a protracted slump with the dollar hitting fresh 2018 highs.

Copper for September delivery edged down 0.6% to $2.7305 a pound on the Comex division of the New York Mercantile Exchange, on track for its lowest close in nearly a year. Prices have tumbled more than 15% since hitting a four-year high in early June, hurt by worries that tariffs will slow the global economy and lower demand for materials used in construction and manufacturing.

A stronger dollar has also hurt copper and other metals by making them more expensive for overseas buyers. On Wednesday, the WSJ Dollar Index, which tracks the dollar against a basket of 16 other currencies, rose 0.2% after closing at its highest level since June 2017 a day earlier.

Weak economic data from China, the world's largest consumer of copper and other commodities, has also hurt sentiment, analysts have said. Bets by hedge funds and other speculative investors on lower copper prices outnumbered bullish bets for the first time since 2016 during the week ended July 10, according to Commodity Futures Trading Commission data released last week.

"There's no fundamental reason why prices have fallen so sharply. I think sentiment was very bullish and now it's neutral," said Carsten Menke, commodities analyst at Julius Baer. "I think prices were too high and now they're fairer."

Analysts are monitoring wage negotiations at BHP Billiton's Chilean Escondida mine, the world's largest copper project, for signs of unrest that could disrupt output. Steady copper supply data this year has also hurt prices, after strikes at Escondida and other supply shocks boosted the red metal last year.

Among precious metals, gold for August delivery fell 0.3% to $1,223.90 a troy ounce in a fourth consecutive session of losses. Prices have hit their lowest level in more than a year with the dollar surging and a rise in Treasury yields making gold less attractive to some investors.

Write to David Hodari at [email protected] and Amrith Ramkumar at [email protected]