Copper Prices Decline as LME Stocks Surge
Copper prices on the London Metal Exchange (LME) fell today due to a significant increase in stock levels at LME-approved warehouses. Stocks have surged over 60% since mid-May to 167,825 tonnes, primarily driven by deliveries from China to Asian warehouses. The industrial metals sector is also facing pressures from rising protectionism, such as the European Union's plans for tariffs on Chinese-made electric vehicles, according to Kedia Advisory.
However, supply-side issues may limit the losses for copper. Production at Anglo-American's Los Bronces copper mine in Chile is expected to fall around 30% due to plant maintenance, according to Dow Jones. At 0800 IST, the three-month copper contract on LME was at $9,534.0 per tonne, down 0.3% from the previous close.
Gold prices on the COMEX fell today as higher-than-expected inflation has diminished expectations of US Federal Reserve rate cuts later this year. Higher interest rates make non-interest-yielding bullion less appealing to investors.
On Tuesday, Fed Governor Lisa Cook indicated that a rate cut might be appropriate at some point, but the timing remains uncertain. Fed Governor Bowman stated that she does not anticipate any rate cuts this year, according to Dow Jones. This week's focus is on the key US personal consumption expenditure price index data, the Federal Reserve's preferred inflation gauge, which will influence its rate outlook.
Despite the recent dip, ongoing geopolitical tensions could support gold prices. Analysts remain positive on gold for the long term, according to Dow Jones. At 0743 IST, the August gold contract on the COMEX was at $2,325.80 per ounce, down 0.2% from the previous close.
