Copper futures prices plunged to their lowest levels in more than a month Wednesday on profit taking and computerized selling, but analysts remained bullish about the metal.
On other markets, precious metals were mixed, grains and soybeans moved higher, livestock and meat futures were mixed, energy futures were mixed and stock index futures were down slightly.
The nearby copper contract for January delivery settled at $1.24 a pound on New York's Commodity Exchange, 9.2 cents below Tuesday's settlement, after trading as low as $1.2010 during the session. Wednesday's prices were the lowest since Dec. 10, when the December contract ended at $1.2370.
Analysts said the sharp selloff was technically oriented, meaning trading was based more on charts than on fundamental supply-and-demand factors. Computerized sell programs kicked in to accelerate the decline, said Bette Raptopoulos, an analyst in New York with Prudential-Bache Securities Inc.
A tight supply situation that helped boost copper prices from around 63 cents a pound in April to an all-time high of $1.46 on Dec. 31, has begun to ease slightly, Raptopoulos said.
But supplies are still low and demand has not eased, despite some uncertainty about the economy, she said.
"I'm still bullish," Raptopoulos said. "I think it's going to turn around. The key remains the direction of the economy."
Tim Murphy, vice president of Trading Resources Inc. in New York, said Wednesday's sharp decline was merely a technical correction. He predicted copper prices would hit $2 a pound by mid-year.
Also on the Comex, gold retreated slightly while silver gained a bit. Both metals followed fluctuations in crude oil prices and foreign exchange rates, Raptopoulos said.
Gold settled 50 cents to 70 cents lower with March at $484.20 an ounce; silver was 3.5 cents to 3.8 cents higher with March at $6.845 an ounce.
Grain and soybean futures moved higher on the Chicago Board of Trade in a rally led by soybean oil, analysts said.
An Indian trade group's visit to Washington sparked rumors that India hoped to buy a large amount of U.S. soybean oil and wheat, said Joel Karlin, an analyst in Chicago with Research Department Inc.
Soybean oil futures, already rallying on higher European prices, soared on the Indian buying talk, Karlin said. The buying spread to the neighboring soybean and soybean meal pits and eventually spilled over into the grain pits, he said.
Volume was light, however, with many traders awaiting today's release of the Agriculture Department's quarterly report.
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