Copper gains as Fed rate hike expectations cool
Copper prices rose slightly on Monday, supported by improving demand expectations and cooling expectations of a Federal Reserve interest rate hike in October. The benchmark three-month copper contract on the London Metal Exchange gained 0.19%, reaching $14,286 per metric ton by 0300 GMT. The market shifted its focus after weaker-than-expected US jobs data last week reduced the likelihood of an October rate hike by the Fed, with traders now pricing in just an 18% chance, down from 64% a week earlier.
The US dollar climbed to a near 17-month high on Monday, bolstered by a weak euro, which typically pressures dollar-denominated commodities like copper. However, copper found support as oil prices fell, easing inflationary concerns that have weighed on industrial metals. The decline in oil prices followed rising Middle East crude exports and a release of oil stocks by the Group of Seven nations.
Other metals saw mixed movements, with aluminium falling 0.19% and on track for a sixth consecutive day of declines, hitting its lowest level in over three months. Aluminium prices have dropped more than 18% since June due to easing supply concerns and new production capacity in Indonesia. Among other LME metals, zinc lost 0.44%, lead added 0.3%, nickel was little changed, and tin rose 0.24%. The Shanghai Futures Exchange remained closed for China’s National Day and will reopen on October 8.