July 29 (Bloomberg) -- Zinc dropped the most in six weeks in London amid speculation that a rally to the highest level since 2011 lifted prices too far.
Prices climbed yesterday to the highest since Aug. 3, 2011, after posting this year’s biggest monthly advance in June. Orders to withdraw supplies from warehouses tracked by the London Metal Exchange fell a fifth session. From July 21 through yesterday, zinc’s relative-strength index stayed above 70, a level seen by some traders and analysts who study charts as a sign prices are poised to fall.
“We are seeing a technical reaction to recent gains, with some profit taking in a thin market,” Michael Turek, a senior director at Newedge USA LLC in New York, wrote in an e-mail. “There are some who are questioning the sustainability of higher prices.”
Zinc for delivery in three months dropped 1.8 percent to settle at $2,366 a metric ton at 5:50 p.m. on the LME, the biggest loss since June 12.
Copper for delivery in three months declined 0.5 percent to $7,082 a ton ($3.21 a pound) on the LME. Nickel, aluminum and lead dropped in London as tin rose.
In New York. copper futures for delivery in September lost 0.8 percent to settle at $3.219 a pound on the Comex.
The S&P/Case-Shiller index of property values in 20 cities increased 9.3 percent from May 2013, the smallest year-to-year advance since February 2013 and missing the 9.9 percent median projection of economists surveyed by Bloomberg. The Copper Development Association estimates that construction accounts for 40 percent of demand.