Copper prices fell sharply Thursday on growing doubts that demand will increase.
The price of copper for December delivery dropped 20.05 cents, or 6 percent, to settle at $3.0575 a pound.
Copper prices are closely tied to economic activity. The metal is used in everything from electronics products to new housing. Copper prices have been rising this month on the expectation that demand would increase from U.S. home builders and from reconstruction in Japan after that nation's tsunami disaster.
The National Association of Realtors said Thursday that sales of existing homes dropped 3 percent last month. Home sales are in line to match last year's level, which was the worst in 13 years. With sales still weak, new homebuilding will likely remain depressed and orders for copper will stay low.
At the same time, traders now think that rebuilding in Japan won't accelerate until the first quarter of next year, said George Gero, vice president at RBC Global Futures in New York. That means demand for copper in Asia won't be as strong as previously thought.
Other industrial metals fell in copper's wake. January platinum lost $32.70 to finish at $1,490.40 an ounce. December palladium fell $24, or nearly 4 percent, to $584.40 an ounce.
Precious metals were also down. Gold for December delivery fell $34.10, or 2 percent, to settle at $1,612.90 an ounce. December silver dropped 99.6 cents to close at $30.281.
December wheat gained 11.25 to finish at $6.3075 per bushel. December corn rose 11 cents to end at $6.495 per bushel. November soybeans were unchanged at $12.25 a bushel.
Oil prices fell after the death of Libyan dictator Moammar Gadhafi. Before the Libyan civil war, Libya had exported 1.5 million barrels of oil a day, or 2 percent of global demand. When Libya stopped exporting most of that oil eight months ago, it helped push the price of oil to $114 a barrel. While it could take months to ramp up export production there, the death of Gadhafi might help stabilize the country and accelerate the rebuilding process.
Benchmark oil fell 22 cents to end at $86.07 per barrel on the New York Mercantile Exchange.
Heating oil gained 4.89 cents to finish at $3.0301 per gallon, gasoline futures rose 0.4 cents to close at $2.6755 per gallon and natural gas gained 4.4 cents to close at $3.63 per 1,000 cubic feet.
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