Copper May Extend Drop as U.S. Slowdown Spurs Fed to Cut Rates

By Claudia Carpenter

Oct. 24 (Bloomberg) -- Copper may extend declines next week on speculation the U.S. economy is still weakening, spurring the Federal Reserve to lower interest rates.

Thirteen of 24 analysts and traders surveyed by Bloomberg yesterday and Oct. 22 said copper will drop. Seven expected a gain and four were neutral. Copper for delivery in three months on the London Metal Exchange has dropped 19 percent this week.

Traders increased bets on a rate drop next week. Interest- rate futures show an 86 percent chance the Fed will lower borrowing costs to 1 percent on Oct. 29, compared with a 46 percent chance a week ago. The U.S. is the second-biggest copper consumer after China.

This week's survey results: Bullish: 7 Bearish: 13 Neutral: 4

To contact the reporter on this story: Claudia Carpenter in London at ccarpenter2@bloomberg.net