FX.co ★ Copper Falls on Rate Hike Concerns

Copper futures fell to about $6.45 per pound on Thursday, extending declines for a second straight session, as expectations of tighter monetary policy in response to an energy-driven inflation shock weighed on demand prospects. Ongoing conflict in the Middle East and the near-closure of the Strait of Hormuz continued to dampen the global growth outlook.

Robust US labor market data strengthened expectations that the Federal Reserve will raise interest rates this year, a marked reversal from earlier forecasts of rate cuts. At the same time, traders are closely watching potential US tariff decisions that could introduce duties on copper imports, spurring a rush of shipments into US ports ahead of any policy changes.

On the supply side, Chile — the world’s largest copper producer — reported its weakest April output in 23 years, intensifying concerns about tightening global supply.