Forexpros – Copper futures tumbled on Monday, as the U.S. dollar rallied against its major counterparts after Japan intervened in the foreign-exchange market to weaken the yen, while lingering concerns over the debt crisis in the euro zone also weighed.
On the Comex division of the New York Mercantile Exchange, copper futures for December delivery traded at USD3.599 a pound during European morning trade, tumbling 2.89%.
It earlier fell by as much as 3.5% to trade at USD3.567 a pound, the lowest price since October 27.
Copper’s losses came as the dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, rallied 1.2% to trade at 76.12.
The greenback’s gains came after Japanese officials launched an intervention to curb the appreciation of the yen after the dollar fell to a record low of JPY75.56 in early trade Monday.
Japanese Finance Minister Jun Azumi said Tokyo had acted on its own and would keep intervening until it was satisfied with the results.
A stronger dollar reduces demand for raw materials as an alternative investment and makes dollar-priced commodities more expensive for holders of other currencies.
Meanwhile, lingering concerns over the euro zone debt crisis also weighed. European Central Bank Governing Council Member Jens Weidmann said earlier that Greece’s fundamental problems remain “unsolved” following last week’s euro zone summit.
On Friday, ratings agency Fitch said that writedowns on Greek debt would indicate a default, while Italy’s borrowing costs rose to a euro lifetime high.
In industry news, workers at Chile’s Collahuasi mine ended a partial strike on Saturday after reaching an agreement with management over bonus payments.
Collahuasi, co-owned by mining giants Xstrata and Anglo American, is the world’s third largest copper mine, accounting for nearly 3% of global copper production.
However, a work stoppage continued at Freeport McMoran Copper & Gold’s Grasberg mine in Indonesia, the world’s second largest, as negotiations between union and management remain deadlocked.
Elsewhere on the Comex, gold for December delivery dropped 1.62% to trade at USD1,718.85 a troy ounce, while silver for December delivery tumbled 2.67% to trade at USD34.34 a troy ounce.
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