LONDON- Copper prices in London reversed earlier gains on Friday after US Federal Reserve Chair Jerome Powell said the US central bank might need to raise interest rates further to contain inflation.
Three-month copper on the London Metal Exchange (LME) was flat at $8,357 per metric ton.
Powell said Fed policymakers would “proceed carefully as we decide whether to tighten further,” and made clear the central bank had not yet concluded that its benchmark interest rate was high enough to be sure inflation returns to its 2 percent target. The US dollar index touched its highest since June 1
Copper, used widely in the power and construction sectors, was still on track to break a run of three weekly declines, boosted by a potential demand uplift from support for China’s housing market and short-covering by computer-driven funds.
Traders and investors are now shifting their focus to September and October, traditionally strong consumption months for copper in China.
“With no COVID-19 lockdown restrictions in the country for the first time in three years, in addition to a ramp up in targeted policy and stimulus efforts, focus is now firmly centered on the timing and pace of demand recovery in the months ahead,” StoneX said in a research note on Friday. – Reuters
