Copper Rally Fades

Among the miners, shares of Southern Copper(PCU Quote) slipped 1%, after Reuters reported that the company forecast an average price of $3 a pound for copper this year.

Rio Tinto(RTP Quote) was rose 0.9%.

In ferrous metals, steel prices are soft in China according to a new report by Shanghai-based GroWell Research & Consulting, although the firm predicts the market will improve shortly.

Turning to precious metals, gold prices fell $6.90 to close at $657.30 an ounce on the Comex. The bullion ETFs, streetTracks Gold Shares(GLD Quote) and iShares Comex Gold Trust (IAU Quote), were down about 0.9%.

Surprisingly, the capture by Iran of 15 British Royal Marine commandos in the Persian Gulf failed to give the bullion price any lift. Some investors purchase gold in times of geopolitical turmoil.

"Perhaps the incident will be resolved without any further escalation by using diplomacy," says Jon Nadler an analyst at Montreal-based bullion dealer Kitco. "But oil is telling a different story."

Crude prices were up 59 cents to $62.28 a barrel. A conflict involving Iran, OPEC's second-largest oil exporter, could interrupt global energy supplies.

Underlying the price action on Comex, open interest in the June bullion contract reached 10 million ounces while that of the April contract totaled 13.7 million, as traders rolled forward positions to the later-dated instrument. June will soon take over as the benchmark as open interest grows.