- Copper prices on the London Metal Exchange declined on inflation fears and supply shortages
- The metal’s price per tonne clipped 0.3% on Friday morning, after another 0.6% slip on Tuesday
- The greenback has firmed against the euro, yen, and pound amid bets the Fed will hasten interest rate hikes
The price of copper declined on Friday after the dollar index rose to its highest level in months, increasing investor fears of inflation.
The market often looks at copper’s performance as a measure of growth across the global markets, and this week’s firming of the greenback against its peers has seen the metal decline to raise fears that post-COVID 19 recovery might take longer than predicted.
The value of copper on the London Metal Exchange fell 0.3% for the three-month contract. In early deals on Friday, the metal changed hands at $9,608 per tonne, although the losses look likely to be stemmed in later sessions and see copper close the week in green.
Copper prices also slipped on Tuesday as the market reacted to potential shortages. The widely held December delivery contracts dipped 0.6%, changing hands around $9,614 per tonne. Dour inflation news on Thursday added to the anxiety as US lawmakers looked to pass the $1 trillion infrastructure bill.
The sector has also been hindered by concerns in the Chinese property market, with the largest share of global copper reserves consumed in the country.
Spot gold is also down 0.22% on Friday and was poised at $1,857.52 per ounce as of 0720 GMT. But while the precious metal has declined from multi-month highs hit earlier this week, it’s headed for its best weekly returns since May. As of writing, gold is set to beat 2.2% in seven-day gains.
Hotter-than-expected US inflation data has seen the market bet on the Fed raising interest rates, with the world’s largest economy likely to experience a slowdown in its anticipated recovery.