Rate Hike Fears Weigh on Copper Demand Hopes

Copper prices dipped on Tuesday as expectations of a US interest rate hike weighed on demand hopes. Benchmark three-month copper on the London Metal Exchange fell by 0.5% to $13,664 a metric ton.

The market is awaiting the outcome of the US Federal Reserve meeting, due on Wednesday. According to Galaxy Futures analysts, easing tensions between the US and Iran have pushed crude oil prices lower, but expectations of further Federal Reserve rate hikes have risen.

Expectations that the Fed will hold interest rates steady stand at 62%, while 38% of market participants expect at least a 25 basis points hike. This is up from 16% a week earlier.