Copper Snaps Five-Session Winning Streak

NEW YORK—Copper futures faltered Thursday as positive U.S. data and tighter Chinese monetary policy led participants to buy the dollar and book profits in the red metal. The front month copper contract for January delivery fell 6.6 cents, or 1.9%, to $3.4115 a pound n the Comex division of the New York Mercantile Exchange, snapping a five-session wining streak. Most-active March copper lost 6.75 cents to settle at $3.4270 a pound. A smaller-than-expected rise in U.S. jobless claims kept the dollar higher and pressure on copper. The currency had gained overnight on weaker-than-expected euro-zone data and sagging global stock markets after China moved to tighten its monetary policy. Some see the move, in the form of a higher yield in its weekly bill sale, potentially pressuring the Fed to tighten U.S. policy more quickly. "That's enough to spark profit-taking very easily," said Sterling Smith, an analyst with Country Hedging. The Labor Department reported initial claims for state unemployment benefits last week rose 1,000 to 434,000, less than expected While data showing a continued economic recovery, and optimism about further progress, have helped copper prices recently, such data also have been leading some to believe the Federal Reserve will raise interest rates sooner than previously expected this year. That would boost the dollar and remove some of the easy money that has spurred investment demand in copper. Also, dollar-denominated assets like copper often trade inversely to the greenback because dollar movements make them more or less expensive for those using other currencies. Meanwhile, some participants were also booking profits amid caution ahead of key U.S. jobs data Friday, said Ralph Preston, senior market analyst with Heritage West Financial. Economists expect the Friday employment report, to be released at 8:30 a.m. EST Friday, to show a decline of 10,000 for nonfarm payrolls and an unemployment rate of 10.1%. Inventories of copper stored in London Metal Exchange warehouses rose 75 metric tons Thursday, leaving them at 507,475 metric tons. The most recent Comex inventory data, released late Wednesday afternoon, were unchanged at 99,368 short tons.