By Anna Stablum Nov. 17 (Bloomberg) -- Copper fell in London as the dollar rebounded from a 15-month low, eroding demand for commodities as an alternative investment. Federal Reserve policy will ensure that the “dollar is strong,” Ben S. Bernanke, the central bank’s chairman, said yesterday. A weaker dollar makes metals priced in the currency cheaper for holders of other monies. Copper also dropped as the World Bank’s chief economist said the global economic rebound remains “fragile.” “Moves in the dollar tend to be a proxy for the level of risk appetite in the market,” Nicholas Snowdon, an analyst at Barclays Capital in London, said by phone. A firmer dollar may reduce demand for riskier assets, he said. Copper for three-month delivery fell $63, or 0.9 percent, to $6,787 a metric ton on the London Metal Exchange at 10:30 a.m. local time. The contract reached $6,865 yesterday, the highest intraday price since Sept. 26 last year. March-delivery copper dropped 0.8 percent to $3.1045 a pound on the New York Mercantile Exchange’s Comex division. The Dollar Index, a six-currency gauge of the greenback’s value, gained as much as 0.4 percent. The U.S. continues to face “significant economic challenges,” Bernanke said yesterday at a New York luncheon. He repeated the Fed’s Nov. 4 pledge to keep interest rates low for an “extended period.” Recession’s Depth “It might indicate to some the recession is deeper and longer than they had expected,” Snowdon said. “At the same time, people might draw confidence that the government’s fiscal and monetary policy support mechanisms will last longer than previously expected.” Governments should maintain fiscal stimulus measures, Justin Lin, chief economist at the World Bank, told reporters in Seoul. A report today may show that growth in U.S. industrial production slowed last month. Output climbed 0.4 percent after gaining 0.7 percent in September, according to economists surveyed by Bloomberg. The figures are due at 2:15 p.m. London time. Manufacturing accounts for about 12 percent of the economy in the U.S., the world’s second-largest copper user after China. Copper inventories monitored by the LME rose for an 11th day, advancing 1.2 percent to 410,000 tons, the most since April 29. Stockpiles have increased for 18 weeks in a row. Numis Favors Copper “Rising inventories are a concern, but less so in copper than for other base metals,” Andy Davidson, an analyst at Numis Securities Ltd. in London, said by phone. Prices will draw support from delays to projects, wage negotiations in progress now and a lack of investment in exploration over the past decade, he said. “In the next two to five years, we are most bullish on copper among the base metals,” Davidson said. Among other LME metals for three-month delivery, aluminum gained 0.3 percent to $2,037 a ton. Fund interest in commodities supported prices, Laredo, Texas-based researcher Harbor Intelligence said in a report yesterday. The lightweight metal will trade between $2,100 and $2,400 a ton by the end of the year, according to the report. “We could get to $2,100 per ton before the end of the week,” Harbor said. Nickel fell 0.6 percent to $16,701 a ton. Stockpiles rose for a 10th day to 132,912 tons, the highest since February 1995. Zinc lost 1.7 percent to $2,240 a ton, and lead dropped 1.6 percent to $2,352.25 a ton. Tin shed 1.3 percent to $14,800 a ton. To contact the reporter on this story: Anna Stablum in London at astablum@bloomberg.net

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