LME copper prices fall as hawkish Fed comments push dollar higher Source: Wenhua Finance
Copper prices on the LME retreated on Thursday as the U.S. dollar rose after the U.S. Federal Reserve signaled that it could tighten monetary policy faster than expected.
At 17:00 London time on January 27 (01:00 Beijing time on January 28), the LME three-month copper price fell $134.50, or 1.4%, to $9,782 a tonne, ending a two-day rise in a row.
In a news conference after the Federal Open Market Committee (FOMC) meeting, Fed Chairman Jerome Powell said: “The Committee intends to raise the federal funds rate at its March meeting, if conditions are right.”
The news pushed the dollar to its highest level since July 2020, making the dollar-denominated metal less attractive to global buyers.
“Powell’s hawkish tone yesterday undermined the performance of commodities, including base metals,” said Nitesh Shah, commodity strategist at WisdomTree.
“Reduced liquidity means that the factors driving demand for these metals will weaken.”
The number of LME copper registered warehouse receipts is small, limiting the expansion of the decline.Copper registered warehouse receipts fell to a two-month low of 65,750 tonnes, data showed
. Overall production was flat in the fourth quarter, with strong diamond production offsetting a 4% decline in copper, miner Anglo American said, which it expects to see higher prices this year.
Chile’s Senate on Thursday advanced revisions to the country’s mining royalties bill that would raise taxes and fees for miners operating in the world‘s largest copper-producing country.
U.S. Secretary of State Blinken said in Washington on the 26th local time that the United States rejected Russia’s relevant demands in its written reply to Russia on security issues, but offered a path to resolve the Ukraine issue through diplomatic means. Russia is a major producer of metals such as nickel and palladium.
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