Copper Falls as Strong Dollar Weighs

Copper futures declined toward $6.20 per pound on Thursday, approaching fresh four-month lows as the US dollar strengthened amid growing expectations of more aggressive Federal Reserve rate hikes following hotter-than-expected inflation data. Increasingly hawkish signals from Fed officials further supported the greenback, putting additional pressure on dollar-denominated commodities such as copper by making them more expensive for buyers using other currencies.

Prices also came under pressure from rising inventories at the London Metal Exchange, which reached approximately 320,000 tons by mid-November, up considerably from August’s low of 205,000 tons. However, tighter physical supply in China provided some support, with domestic import premiums climbing to record levels in recent weeks. China has also struggled to replenish its inventories as significant volumes of copper have been diverted to the US ahead of potential import tariffs. Source: Trading Economics

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