Copper prices hit two-week highs on Tuesday as the dollar eased after expectations of U.S. interest rate cuts next month were boosted by President Donald Trump’s saying he would remove Federal Reserve Governor Lisa Cook.
A lower U.S. currency makes dollar-priced metals cheaper for holders of other currencies, boosting demand and prices.
However, traders said the copper price had retreated since the initial knee-jerk reaction due to a steadier dollar and selling by Chinese companies.
Trump said in a letter he was firing Cook over alleged improprieties in obtaining mortgage loans, a move analysts say reinforced investor concern about the independence of the U.S. central bank.
Benchmark copper HG1! on the London Metal Exchange was down 0.1% $9,790 a metric ton at 1019 GMT from an earlier $9,862, the highest since August 13.
A plus for copper is the disruption to the supply in Chile, where the mining regulator Sernageomin has imposed additional requirements on Codelco for resuming operations in areas affected by a deadly collapse at its El Teniente copper mine.
Codelco, the world’s largest copper producer, has cut its copper forecast for the year due to the impact of the incident.
On the technical front, initial support for copper is at the 50-day moving average at $9,754 followed by the 21-day moving average at $9,731.
Elsewhere, traders expect zinc prices to be supported by sliding inventories in LME-approved warehouses, which at 65,525 have dropped 66% since the middle of April (MZNSTX-TOTAL).
Cancelled warrants or metal earmarked for delivery indicate another 23,725 tons are due to leave the LME system.
Worries about supplies on the LME market have narrowed the discount for the cash zinc contract over the three-month forward (CMZN0-3) to around $3 a ton from levels above $40 in April.
Three-month zinc ZNC1! was down 0.8% at $2,794 a ton, aluminium ALI1! fell 0.9% to $2,602, lead LEAD1! retreated 0.2% $1,991, tin FTIN1! rose 0.2% to $33,875 and nickel NICKEL1! climbed 0.3% to $15,145.
Industrial metals markets are waiting for clues to demand prospects in top consumer China from surveys of purchasing managers in its manufacturing industry.
Source: Reuters
