Copper Sees Worst Losing Streak Since 2018 on Virus Fears
(Bloomberg) -- Copper saw its worst streak of losses since mid-2018 as more patients were infected by the deadly coronavirus in the U.S., spurring a sell-off in riskier assets while boosting gold’s haven appeal.
U.S. officials are monitoring more than 60 people as they attempt to catch new cases of coronavirus in travelers from China, the center of the outbreak. Mounting concerns that the spreading deadly disease could further crimp global growth sent equities and commodities declining.
China, the world’s largest consumer of commodities including industrial metals, locked down Wuhan and its surrounding areas to contain the coronavirus, the first large-scale quarantine in modern times.
“If you all of a sudden take China off the board because you’re looking at shutting down mills and shutting down transportation to the mills, it’s going to hurt,” said Peter Thomas, a senior vice president at Chicago-based broker Zaner Group, said by phone.
Copper, often a barometer of global growth, fell 1.5% to settle at $2.684 a pound at 1:02 p.m. on the Comex in New York. March futures are down 6.6% since mid-January, the biggest seven-session loss for a most-active contract since July 11, 2018.
“We suspect that even more demand destruction fear is justified because the virus will also undermine Chinese sentiment and dampen the biggest shopping period of the Chinese calendar,” Phil Streible, chief market strategist at Blue Line Futures, said on an emailed note.
The Bloomberg Industrial Metals Subindex Total Return, which tracks copper, aluminum, zinc and nickel, slipped 1.3%, poised for the steepest four-day decline since September 2018. The wider commodities gauge is set for the biggest weekly loss since December 2018.
The outbreak has also boosted bullion’s appeal as haven. Over the past five days, investors poured more than $1 billion into SPDR Gold Shares, the largest exchange-traded fund backed by the metal.
On the Comex in New York, gold futures for April delivery rose, posting five straight weekly gains.
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