LONDON- Copper eased as some investors questioned whether recent gains were exaggerated and not fully supported by supply and demand fundamentals.
Benchmark copper stormed to $7,000 a ton on Wednesday, its highest in 28 months and up more than 50 percent since late March, partly owing to rumors that China would soon announce a stockpiling plan.
“There’s fundamental support for the copper market, but does that justify $7,000? I don’t think so, it’s more at the upper end of what the fundamentals justify,” said Carsten Menke, analyst at Julius Baer in Zurich.
“But the downside should likewise be limited … People still think the COVID pandemic could cause supply disruptions.”
Three-month copper on the London Metal Exchange (LME) was down 0.7 percent at $6,874 a ton and set for a 2 percent weekly gain.
“We are now neutral to bearish towards prices in Q4 as technical indicators suggest the metal price rally is overextended,” Fitch Solutions said in a report.
Wider financial markets were in a tight range as traders awaited a breakthrough in economic stimulus talks in Washington. — Reuters