London copper prices held steady on Wednesday as investors cautiously awaited cues on how soon the US Federal Reserve would start raising interest rates, while sentiment got a lift amid hopes of further stimulus measures from top consumer China.
Three-month copper on the London Metal Exchange was steady at $9,417 a ton, but hovered close to a one-week low hit in the previous session.
The most-traded January copper contract on the Shanghai Futures Exchange was down 0.2 percent at 68,760 yuan a ton.
“Copper prices are seeing buy-the-dip reaction as it approaches yesterday’s low,” a Singapore-based trader said, requesting anonymity.
Prices of copper, often used as a gauge of global economic health, are likely to remain supported as China speeds up fiscal stimulus and ease monetary conditions, while “interest rate hikes in the United States would be slow with the Fed still believing inflation to be transitory,” he added.
The US central bank’s two-day policy meeting is due to wrap up later in the day with investors expecting the Fed to announce a faster end of its bond-buying program and then proceed with an interest rate hike from near zero.
An early rate hike could trim liquidity in financial markets and slow recovery in the world’s biggest economy.
Meanwhile, China’s central bank injected funds into the financial system through medium-term loans, while keeping the interest rate unchanged. Its earlier decision to lower banks’ reserve requirement ratio also came into effect on Wednesday. — Reuters
