Investing.com - Copper prices fell sharply on Thursday, as the U.S. dollar surged after the Federal Reserve ended its quantitative easing program and sounded more hawkish on its assessment of the economy.
On the Comex division of the New York Mercantile Exchange, copper for December delivery fell by as much as 1.3% to hit a session low of $3.064 a pound.
Prices recovered to last trade at $3.076 a pound during European morning hours, down 2.9 cents, or 0.92%.
Futures were likely to find support at $3.055, the low from October 28, and resistance at $3.114, the high from October 29.
The Federal Reserve ended its large-scale asset purchase program, known as quantitative easing, at the conclusion of its two-day policy meeting on Wednesday, as widely expected.
The Fed retained its commitment to keep interest rates near zero for a “considerable time," but sounded more hawkish on the labor market, saying that “underutilization of labor resources is gradually diminishing.”
Prior statements from the Fed described the slack in the jobs market as "significant."
The US dollar index, which tracks the performance of the greenback against a basket of six major rivals, surged to a three-and-a-half-week high, as market players brought forward expectations of when the Fed would eventually raise rates.
A stronger dollar reduces demand for raw materials as an alternative investment and makes dollar-priced commodities more expensive for holders of other currencies.
Elsewhere on the Comex, gold futures for December delivery tumbled $20.90, or 1.71%, to trade at $1,204.00 a troy ounce, while silver futures for December delivery plunged 42.1 cents, or 2.44% to trade at $16.84 an ounce.
Later in the day, the U.S. was to publish preliminary data on third quarter GDP, as well as the weekly report on initial jobless claims. In addition, Fed Chair Janet Yellen was to speak at an event in Washington.