Stimulus Check – METALS-Copper prices dip ahead of Fed meeting
LONDON, July 27 (Reuters) – Copper prices snapped a five-session winning streak on Tuesday as investors held off on making large bets ahead of a U.S. Federal Reserve meeting expected to give more direction on monetary policy.
Benchmark copper on the London Metal Exchange was down 0.8% at $9,735 per tonne at 1635 GMT, after touching its highest since June 15 at $9,924.
“Given the scale of moves we have seen since the (close of business) 19th July … some sort of pause was to be expected especially given the Fed’s two-day meet,” said Alastair Munro at broker Marex.
The dollar dipped late on Tuesday, having been boosted in recent weeks by expectations the Fed would ease monetary stimulus as the world’s largest economy recovers from the COVID-19 pandemic.
Sentiment was cautious as investors awaited the outcome of the Fed meeting on Wednesday for clues on interest rate policy that could impact the dollar and liquidity in the financial markets.
FORECAST: Goldman Sachs says copper prices are poised to increase as demand outpaces supply since the concentrate market is very tight, particularly in China.
The bank’s three-month, six-month and 12-month price target for copper is $10,500/t, $11,000/t and $11,500/t, respectively.
ALUMINIUM: Miner Rio Tinto said it planned to cut production at its BC Works aluminium smelter in Kitimat, Canada to 35% following a strike.
FLOODS: Heavy rains in China have boosted hopes for higher copper and aluminium demand, while Commerzbank says aluminium production halting in the affected regions could also support prices.
PERU: A four-day-long blockade in Peru by protesters seeking greater benefits from natural resources is disrupting operations of MMG Ltd’s Las Bambas copper mine, one of the country’s largest.
OTHER PRICES: Aluminium shed 1.4% to $2,483 a tonne, zinc was down 1.6% to $2,967, lead lost 1.6% to $2,335, tin gave up 1.6% to $34,230 and nickel fell 1.9% to $19,342. (Reporting by Zandi Shabalala Editing by David Evans and Mark Potter)