Metals fall on worries of long European crisis

AP News
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Posted: Oct 17, 2011 4:19 PM
Metals fall on worries of long European crisis

Metal prices fell Monday on increasing doubts that European leaders will act soon to contain that region's financial crisis.

Copper for December delivery dropped 3.05 cents, or nearly 1 percent, to end at $3.3780 a pound. January platinum fell $3.10 to finish at $1,551.80 an ounce. December palladium lost $3.75, or 0.6 percent, to $616.80 an ounce.

Metals including copper and palladium rose last week. Investors were hoping that European finance ministers would strike a deal to slow the debt crisis there and prevent it from affecting the global economy.

That confidence was shaken Monday when a spokesman for German Chancellor Angela Merkel suggested a full rescue package could take months to craft.

Steffen Seibert said an upcoming weekend EU meeting will only be an "important step" on a long road to fixing the European financial crisis.

European leaders are working on a major rescue package for European banks and heavily indebted nations like Greece, Seibert said. But it's unrealistic to expect the problems will be solved by one rescue package, no matter how large.

"These are important steps on a long path, and that is a path that will continue far into next year where other steps must follow," he said.

The statement quickly halted last week's rally in metals prices. Copper and palladium are used as raw materials in the world's factories. The price of those metals tends to rise with economic growth, which stokes demand.

Precious metals also fell. Gold for December delivery dropped $6.40 to close at $1,676.60 an ounce. December silver lost 35.2 cents, or nearly 1 percent, to close at $31.821.

In other trading, December wheat gained 1.5 cents, or less than 1 percent, to finish at $6.2425 per bushel. December corn rose 0.5 cents to end at $6.405 per bushel. November soybeans lost 17 cents, or 1.5 percent, to end at $12.53 a bushel.

Oil prices fell. Benchmark oil lost 42 cents, or less than 1 percent, to end at $86.38 per barrel on the New York Mercantile Exchange.

Heating oil fell 4.22 cents to finish at $3.0136 per gallon, gasoline futures lost 8.18 cents to close at $2.7429 per gallon and natural gas fell 1.5 cents to $3.688 per 1,000 cubic feet.