(Updates with closing prices) By Peter Hobson LONDON, Jan 3 (Reuters) - Copper and most other industrialmetals fell on Friday as the killing of a top Iranian commanderby the United States sent shockwaves through markets, pushingoil prices sharply higher.
Investors rushed to safe-haven assets such as gold and stockmarkets fell as Iran said it would seek revenge. Benchmark copper on the London Metal Exchange (LME)ended down 1% at $6,129.50 a tonne after touching its lowestsince Dec. 11 at $6,088.50.
The metal used in power and construction has fallen around1.5% this week, breaking a run of six weekly gains that hadlifted prices to seven-month highs.
"Sentiment has been broken just a few days into the newyear," said Saxo Bank analyst Ole Hansen. "Copper is underpressure from the potential impact on growth of an escalation(between the United States and Iran)." The confrontation could worsen friction between Washingtonand Beijing, already locked in a damaging trade dispute, whilehigher oil prices would dampen economic activity, potentiallyweakening metals demand, Hansen said.
China's foreign ministry said on Friday it consistentlyopposes the use of force in international relations. IRAN STRIKE: Iran threatened to hit back hard after a U.S.air strike in Baghdad killed Qassem Soleimani, commander ofIran's elite Quds Force and one of the country's most powerfulmen. MARKETS: Oil prices rose 3% to around $68 a barrel.European, U.S. and Chinese shares fell. U.S. FACTORIES: The U.S. manufacturing sector contracted inDecember by the most in more than a decade, an industry reportsaid on Friday. CHINA: China will keep its inflation target unchanged thisyear at around 3%, sources told Reuters, suggesting policymakerswill roll out more economic support measures while avoidingaggressive stimulus. The report comes after metals prices were boosted by areduction in Chinese bank reserve requirements and data whichshowed China's factory activity was not collapsing. China is the world's largest consumer of metals.
IMPORT PREMIUMS: Chinese Yangshan import premiums slipped to$57 from $85 in September, pointing to weaker demand for foreignmetal. COPPER STOCKS: Inventories in LME-registered warehouses havemore than halved since August to 144,525 tonnes, while stocks inShanghai Futures Exchange warehouses, at 141,317 tonnes, are upnearly 30,000 tonnes from early December. NICKEL: Benchmark nickel finished down 3.5% at$13,755 a tonne, having touched its lowest since Dec. 12 afterbreaks below its 20- and 30-day moving averages encouragedtechnical selling.
OTHER METALS: LME zinc fell 0.2% to $2,306, lead was flat at $1,919 and tin slipped 2.2% to$16,800. LME aluminium closed up 1.1% at $1,824.
All were heading for weekly losses aside from aluminium,which was roughly flat. (Additional reporting by Tom Daly; Editing by David Evans andJan Harvey and Kirsten Donovan)
LME price overview COMEX copper futures All metals news All commodities news Foreign exchange rates SPEED GUIDES )) Disclaimer: The views expressed in this article are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure accuracy of information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.