Copper Prices Slump Amid Fed Anxiety, Aluminium Surges on Supply Fears

Copper prices retreated slightly on Wednesday as investors remained cautious ahead of the US Federal Reserve's interest rate decision. The world's largest copper consumer, China, showed signs of easing supply tightness, weighing on sentiment. In contrast, aluminium prices rose due to renewed fighting in the Middle East and concerns over potential supply disruptions.

The benchmark three-month copper contract on the London Metal Exchange (LME) fell 0.4% to $13,631 per metric ton by 1002 GMT. This drop occurred despite the contract remaining above its 50-day moving average of $13,576, a key technical support level watched by traders.

The US dollar hovered near one-month highs as market participants awaited the Fed's policy announcement for further guidance on interest rates. A stronger dollar typically makes dollar-denominated metals more expensive for buyers using other currencies, potentially weighing on demand.