Copper prices drop

COPPER prices fell yesterday as a slightly firmer dollar dented the appeal of greenback-priced metals, with investors exercising caution as the US presidential election results continued to trickle in.

Three-month copper on the London Metal Exchange dipped 0.1 percent to US$6,845 a tonne, says Absa Bank Zambia Daily Market report.

Absa Bank indicated that as this development was taking place, most-traded December copper contract on the Shanghai Futures Exchange declined 0.1 percent to 51,490 yuan (US$7,763.17) a tonne.

Meanwhile, US oil fell more than two percent as new lockdowns in Europe to halt surging infections of COVID-19 sparked concern about the outlook for demand, while markets remained on edge over drawn-out vote counting in the U.S. election.

Brent crude was off US$1.05, or 2.6 percent, at US$39.88, having fallen 0.7 percent in the previous session.

Gold prices also fell after surging in the previous session, as the dollar gained, but was set for its best week since late July on hopes for more central bank economic support as investors bet on a divided U.S. Congress under a Biden presidency.

Spot gold fell 0.6 percent to US$1,936.95 per ounce while prices soared 2.4 percent on Thursday on a dollar slide, setting it up for a 3.1 percent gain the week.

Meanwhile, the Zambian Kwacha held steady against the dollar on Thursday but was anticipated to lose ground due to increased dollar appetite from the energy and merchandise importers coupled with weak dollar supply.

"The Kwacha closed the day at its opening levels of K20.55/20.60 to the dollar where it traded throughout the day.

"With dollar inflows still very low and demand swelling, the local unit is likely to add on to its losses in the short term," Absa bank said.

On the money market, the liquidity levels in the market in yesterday’s trading session recorded a marginal increase from K4.18 bllion to K4.32 billion, on the other hand the funds traded on the interbank decreased from yesterday’s record of K456.50 million to K129.00.

The weighted overnight interbank rate increased by 4 Basis points to 8.02 percent.

Elsewhere, South Africa's rand firmed on Thursday, remaining below the key technical level of 16.00 to the dollar breached in a rally driven by increasing indications that Joe Biden was moving closer to victory in a tight U.S. presidential election.

The rand was 0.33 percent firmer at 15.7975 per dollar, after hitting a new eight-month best of 15.7575 earlier in the session. for