Copper rebounded from its lowest close in four months as metals received a boost from speculation the Federal Reserve is set to pause hiking interest rates, which increased appetite for risk assets.
(Bloomberg) — Copper rebounded from its lowest close in four months as metals received a boost from speculation the Federal Reserve is set to pause hiking interest rates, which increased appetite for risk assets.
The rally comes after copper slipped earlier this week, hit by mixed Chinese data and ongoing banking troubles in the US that reignited fears of a recession. The metal has nearly wiped out gains made earlier this year amid a patchy recovery in China’s economy and growth concerns in western countries.Â
Federal Reserve Chair Jerome Powell hinted the US central bank’s latest interest-rate increase could be the last one in the current cycle, but stopped short of declaring victory in its battle against rapid inflation. He suggested officials may pause their tightening campaign in June to assess how the economy is responding to tighter credit conditions.
The US dollar fell for a third day, making commodities priced in the greenback cheaper to other currency holders.
The gains made due to the Fed rate-pause speculation and a weakening dollar might be short lived, as recession fears are still mounting, Fan Rui, an analyst with Guoyuan Futures Co., said by phone from Shanghai.
Copper gained 1.6% to $8,602.50 a ton on the London Metal Exchange as of 10:11 a.m. in Shanghai. Other industrial metals were mostly higher, with zinc up 0.8%.Â
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