Copper prices fall sharply on Greece worries

AP News
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Posted: Nov 01, 2011 3:49 PM
Copper prices fall sharply on Greece worries

Copper prices fell sharply Tuesday on worries that Europe's financial bailout plan could be undermined by Greek voters.

Copper for December delivery fell 12.95 cents, or 3.6 percent, to settle at $3.5025 a pound. That puts copper down 5 percent this week.

Prices fell after Greek Prime Minister George Papandreou announced that he would put an unpopular European financial rescue package for his country to a popular vote. If the vote fails, it might lead the country into a messy default and threaten Europe's plan for staving off a financial crisis.

Copper prices rose last week on hopes that the European financial rescue plan would shore up the region's banks and foster economic growth. That would increase demand for raw materials like copper and palladium.

Analyst Jon Nadler warned last week that copper prices were being pushed too high by hopes that the bailout would end problems in Europe. On Tuesday, he said traders seemed to be accepting the fact that Europe's problems won't be fixed easily.

"Players have begun to recognize that nicely packaged words do not equate action," Nadler, a senior analyst with Kitco Metals Inc., wrote to clients in a message Tuesday.

December palladium fell $16.15 to close at $635 an ounce. January platinum lost $25.60 to finish at $1,582 an ounce.

Precious metals were also down. Silver fell more than gold. Like gold, silver is precious metal that many traders buy to protect their investments against inflation. But silver is also an industrial metal, used to produce electronics devices.

December silver fell $1.623, or 5 percent, to close at $32.731 an ounce. December gold fell $13.40, or almost 1 percent, to settle at $1,711.80 per ounce.

In other trading, crop prices were mostly higher. December wheat gained 1.75 cents to finish at $6.30 per bushel. December corn rose 7.25 cents to end at $6.5425 per bushel. November soybeans fell 14.75 cents to finish at $12.025 a bushel.

Oil prices fell. Benchmark oil lost $1, or 2 percent, to end at $92.19 per barrel on the New York Mercantile Exchange.

Heating oil fell 2.04 cents to finish at $3.0379 per gallon, gasoline futures rose 1.87 cents to close at $2.6244 per gallon and natural gas lost 13.6 cents to close at $3.92 per 1,000 cubic feet.