Copper prices snapped a five-session winning streak on Tuesday under pressure from a rebounding dollar as investor focus shifted to a US Federal Reserve meeting expected to give more direction on monetary policy.
Copper for delivery in September fell 0.3% from Monday’s settlement price, touching $4.572 per pound ($10,058 per tonne) midday Tuesday on the Comex market in New York.
Benchmark copper on the London Metal Exchange lost 0.8% to $9,727.50 per tonne in official trading, after touching its highest since June 15 at $9,924.
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“Given the scale of moves we have seen since the (close of business) 19th July … some sort of pause was to be expected especially given the Fed’s two-day meet,” said Alastair Munro, an analyst at Marex.
The dollar eased early on Tuesday just below recent peaks, but the currency rebounded later in the session as investors turned their focus to this week’s Federal Reserve meeting.
Goldman Sachs said in a recent note that copper prices are poised to grow as demand outpaces supply since the concentrate market is very tight, particularly in China.
The bank’s three-month, six-month and 12-month price targets for copper are $10,500 per tonne, $11,000 per tonne, and $11,500 per tonne, respectively.
Floods in central China, especially in the industrial and transport hub city of Zhengzhou in Henan province, have raised supply concerns and demand for rebuilding damaged infrastructure.
A four-day-long blockade in Peru by protesters seeking greater benefits from natural resources is also disrupting operations of MMG Ltd’s Las Bambas copper mine, one of the country’s largest.
(With files from Reuters)