Copper Rises After Fed Keeps Rates Steady

Copper futures climbed to around $6.33 per pound on Thursday, recovering from the previous session’s losses as investors welcomed the Federal Reserve’s decision to leave interest rates unchanged, easing concerns about the demand outlook for industrial metals. However, three FOMC members dissented in favor of a rate hike, while Chair Kevin Warsh stressed that the decision to keep rates steady should not be viewed as a sign of policy inertia. Meanwhile, investors looked ahead to updates from the Politburo meeting in top consumer China, where policymakers are widely expected to refrain from announcing major new stimulus measures and instead focus on implementing existing fiscal policies to support the slowing economy. Elsewhere, the red metal continued to draw support from its favorable long-term demand outlook, driven by the global shift toward clean energy and the rapid expansion of artificial intelligence data centers.

Copper futures fell below $6.3 per pound, giving up gains from earlier in the week as investors awaited the Federal Reserve’s upcoming policy decision, with markets pricing in better than a one-third chance of a rate hike. That reflects an unusually high level of uncertainty this close to a Fed meeting compared with recent years. Copper also came under pressure after the US military said it had successfully intercepted what it described as a surprise Iranian attack targeting US troops stationed across the Middle East, reigniting regional tensions and driving oil prices higher. Meanwhile, the red metal continued to find support from its favorable long-term demand outlook, driven by the global transition to clean energy and the rapid expansion of artificial intelligence data centers. On the supply side, signs of near-term tightness in top consumer China continued to underpin prices, while severe storms in leading producer Chile heightened the risk of disruptions to copper production.

Copper futures steadied above $6.3 per pound after experiencing sharp volatility last week, as easing tensions in the Middle East lifted market sentiment. The US and Iran suspended strikes against each other over the weekend amid renewed diplomatic efforts, with President Donald Trump saying Washington was engaged in "good talks" with Tehran aimed at ending the Middle East conflict. Oil prices declined sharply, easing concerns about inflation and the interest rate outlook. Copper also continued to draw support from its strong long-term demand prospects, driven by the global transition to clean energy and the rapid expansion of artificial intelligence data centers. On the supply side, indications of near-term tightness in top consumer China underpinned prices, while severe storms in leading producer Chile raised the risk of disruptions to copper output.