Copper traded near its highest close in two weeks as traders braced for the Federal Reserve's decision on interest rates. The metal slipped 0.2% to $14,447.50 a ton on the London Metal Exchange at 1:25 p.m. in Shanghai. Prices had climbed more than 1% on Tuesday amid a broader surge for metals, fueled by renewed positive sentiment on artificial intelligence as well as signs of supply pressure.
At the Fed's policy meeting on Wednesday, the focus will be on what the US central bank says about the outlook for the economy and inflation. Officials are seen likely to leave rates unchanged, but a hike in December is being priced in. Higher borrowing costs can be a headwind for metals.
Copper has gained about 16% this year in a rally powered by supply tightness, as huge tonnages were shipped to the US in anticipation of import tariffs. On Wednesday, a key spread on the LME spiked higher, indicating more short-term supply stress.
"As the year-end approaches, US tariff policies on refined copper could generate significant market volatility, with the eventual implementation of these policies likely to drive price trends," Chinese brokerage Chaos Ternary Futures Co. wrote in a note. Other metals were mixed, with aluminum gaining 0.4% and zinc and nickel little changed.
Source: Bloomberg Markets · Summarized by HeadlinesBriefing