LONDON: Copper prices dipped on Friday on a strong dollar, after comments by a US Federal Reserve official fuelled worries about how soon interest rates would be cut.
Three-month copper on the London Metal Exchange slipped 0.2% to $8,532 per metric ton by 1515 GMT. The red metal posted its biggest daily gain in a year on Thursday.
New York Federal Reserve President John Williams said it was premature to even be thinking about rate cuts now, pushing back on surging market expectations.
The dollar index rebounded after the comment, making greenback-priced metals more expensive to buyers using other currencies. The dollar had tumbled after updated interest-rate projections of Fed officials, released on Wednesday, showed an expectation for 75 basis points in cuts in 2024.
Earlier in the session, copper was supported after breaking above the key psychological barrier of $8,500 a ton, heading back towards the high hit at the beginning of December, Thu Lan Nguyen, head of Commerzbank’s commodity research, said in a note.
“The International Copper Study Group will be publishing its latest figures for supply and demand next week. If the data confirm a tightening on the market that is suggested for example by China’s high copper imports, the price could chalk up further gains,” said Nguyen.
China, the world’s top consumer of copper, registered accelerating growth in its industrial output for November, data showed on Friday.
The country had been importing more copper in the second half of this year as prices softened. Copper is widely used in construction and the power sector to produce cables, motors and wind turbines. Aluminium prices are on track to post their biggest weekly gains in five months. LME aluminium advanced 1.2%, to $2,236 a metric ton, up about 4.5% from a week ago.
LME zinc gained 1.1% to $2,520 a metric ton, lead rose 1% to $2,090, nickel added 0.5% to $17,050, while tin slid 1.8% to $24,915.
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