Copper Prices Drop Amid Higher Inflation Bets and Fed Rate Hike Worries

Copper prices declined as inflation data pointed to increased bets on Federal Reserve interest rate hikes. Futures on the London Metal Exchange fell by up to 0.6%, marking their first weekly decline since June.

The premium paid for spot copper over 3-month futures narrowed to $4.50 a ton, indicating easing supply tightness. Analysts at Sucden Financial Ltd. noted that copper is likely to remain 'choppy' around current levels until stronger demand or fundamental catalyst provides clearer direction.

Copper had rallied to a record high last week due to expectations of US tariffs on refined metal, prompting traders to pre-emptively ship it to America. Optimism over demand from data centers and renewable energy, along with supply setbacks at key mines, also supported the metal.