Metals prices fall on economic worries

AP News
Posted: Nov 23, 2011 3:25 PM
Metals prices fall on economic worries

Metals prices fell Wednesday on worries that economic growth could slow because of Europe's debt problems.

Prices for industrial metals are closely tied to economic growth. Metals like copper and palladium are used as raw materials to make everything from automobiles to home computers. Worries about an economic slowdown grew Wednesday when an auction of German debt didn't draw enough bids to sell all of the 10-year notes being offered.

The failed debt auction in Germany worried investors because that country is one of Europe's strongest economies. Germany is already bearing much of the burden of bailing out weaker neighbors such as Greece and Portugal.

Borrowing costs in other European countries like Italy and Spain were already considered dangerously high. If the financial crisis in the region intensifies, it could slow economic growth around the world and hinder the fragile U.S. economic recovery.

Platinum for January delivery dropped $12.70, or nearly 1 percent, to settle at $1,558.30 an ounce. December palladium fell $11.30, or nearly 2 percent, to close at $589.85 an ounce. Copper for December delivery fell 5.4 cents to close at $3.279 per pound.

Precious metals were also down because traders think a weaker economy could slow inflation. That undermines demand for metals like gold and silver, which investors buy as a hedge against weakening currencies.

Gold for December delivery fell $6.50 to settle at $1,695.90 per ounce. December silver lost $1.067, or 3 percent, to close at $31.884 an ounce.

Crop prices also dropped. Corn for December delivery fell 10.25 cents, or nearly 1 percent, to settle at $5.8875 per bushel. December soybeans lost 30.5 cents to close at $11.225 a bushel. March wheat fell 8.75 cents, or less than 1 percent, to finish at $5.9425 per bushel.

In energy trading, benchmark crude oil lost $1.84 to end at $96.17 per barrel on the New York Mercantile Exchange.

Heating oil fell 7.51 cents to finish at $2.9714 per gallon. Gasoline futures lost 4.45 cents to close at $2.5205 per gallon and natural gas gained 4.7 cents to close at $3.608 per 1,000 cubic feet.