Copper Dives Amid US Rate Outlook and Inflation Fears
Copper prices retreated from near-record levels on Wednesday as traders weighed the outlook for US interest rates. The metal fell by as much as 0.8% on the London Metal Exchange, pulling back after a six-day advance.
The decline came amid concerns about inflation and comments from Federal Reserve officials. Richmond Fed president Tom Barkin said Tuesday that it could take time for inflationary shocks to wane, while other officials have signalled further tightening may be needed.
The strengthening dollar also weighed on metals priced in the currency, with expectations of more Fed tightening increasing. A Bloomberg gauge of the greenback is heading towards its highest level since July.
Nickel prices fell 0.3%, giving back some of Tuesday's 1.9% surge after drought-related water shortages forced smelters at Indonesia's Morowali processing hub to cut nickel pig iron output.