INDUSTRIAL metals fell on Wednesday as traders weighed the outlook for US interest rates against shifting oil prices, Bloomberg reported.
Copper retreated from near-record levels after a six-day advance, falling as much as 0.8% on the London Metal Exchange (LME).
Several US Federal Reserve policymakers have raised concerns about inflation. Richmond Fed President Tom Barkin said on Tuesday that inflationary shocks could take time to fade, while other officials have signalled that further monetary tightening may be needed.
Those expectations have strengthened the dollar, making dollar-priced metals more expensive for buyers using other currencies. A Bloomberg gauge of the greenback was heading towards its highest level since July.
Higher energy costs stemming from the Middle East conflict have added to inflation concerns and strengthened expectations that interest rates may need to remain higher.
Oil prices eased on Wednesday, however, after US President Donald Trump said US officials had held a “very productive” meeting with Iranian envoys. The comments raised hopes that some of the pressure on energy prices could ease.
Nickel also weakened, falling 0.3% after gaining 1.9% on Tuesday.
The metal had rallied after drought-related water shortages forced smelters at Indonesia’s Morowali processing hub to cut nickel pig iron production.
Three-month copper futures on the LME were down 0.7% at $14,650 a ton at 4:30am London time. Other base metals, including aluminium and zinc, also traded lower.
