Copper was down 2.2% and 1.9% respectively in London and New York as concerns about lower demand and the uncertainty of the US financial bailout plan left traders limiting their holdings.  

Pressure mounted on U.S. lawmakers on Friday to agree on a $700 billion financial rescue plan after talks at the White House collapsed in acrimony and the failure of Washington Mutual, the biggest bank closure in U.S. history, roiled global markets. [ID:nN22402709]
To put the $700 billion into perspective, the current value of the world’s total country central bank gold reserves amounts to $750 billion, RBS said in a research note.

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There are signs of continued demand with London Metal Exchange warehouse stocks dropping to their lowest levels in more than 3 weeks, down 350 tonnes to 200,175 tonnes.  Shanghai Futures Exchange copper inventories also dropped by 6%.  Calyon analyst, Bhar noted that financial market worries may well determine copper’s direction.

The uncertainty, the counterparty risk, the lack of liquidity are factors that will take a long time to be addressed,” he said.
People will not want to be buying in the meantime and demand will remain
very weak. That clearly has to be a threat to consumption growth in the copper
industry.

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