FX.co ★ Copper Holds Decline on Rate Hike Fears

Copper futures traded below $6.30 per pound on Monday, extending a roughly 6% decline over the prior three sessions. The market came under pressure after stronger-than-expected US employment data reinforced expectations that the Federal Reserve could raise interest rates later this year.

Heightened geopolitical tensions in the Middle East further weighed on sentiment, as Iran’s missile attack on Israel pushed energy prices higher and intensified concerns about persistent inflation. A backdrop of elevated inflation and tighter monetary policy threatens to slow economic growth, potentially dampening demand for industrial metals such as copper.

On the supply side, the Trump administration’s June deadline for a decision on potential new US import tariffs has prompted increased copper shipments into the United States, leaving supplies tighter in other regions.

Meanwhile, on the demand front, recent data showed that copper inventories in warehouses monitored by the Shanghai Futures Exchange fell to their lowest level of the year last week, signaling resilient consumption and strong buying interest in China.