Copper slipped 0.6 per cent to US$13,278.50 a metric ton on the London Metal Exchange as traders awaited renewed peace talks between the United States and Iran, and assessed the Federal Reserve's hawkish stance on inflation.
Peace Talks and Fed Policy Weigh on Copper
US President Donald Trump announced that peace talks with Iran are set to resume on Tuesday in Doha, after both sides agreed to halt a series of tit-for-tat attacks over the Strait of Hormuz. The prospect of de-escalation in the Middle East reduced safe-haven demand for copper, which had been supported by geopolitical tensions.
Copper is down 2.6 per cent this month, after posting a record close in May. In addition to the Middle East conflict, traders are tracking the outlook for US monetary policy. Federal Reserve policymakers have signalled growing support for interest-rate hikes in the coming months to combat sticky US inflation. A hawkish Fed tends to strengthen the dollar, posing a headwind for raw materials priced in the greenback.
Fed Officials Warn Inflation Remains Elevated
Fed Bank of Richmond President Tom Barkin warned on Sunday that inflation was too high, although he did see tentative signs that price pressures may moderate soon. A report last week showed the personal consumption expenditures index rose 4.1 per cent in the year through May, the most since April 2023.
According to Harry Jiang, a trader at China-Base Ningbo Group Co., a strong dollar will remain in place amid resilient US economic data, pressuring base metals.
Goldman Sachs Sees Iran Conflict Boosting Metals Demand
Elsewhere, Goldman Sachs Group Inc. said it saw the Iran conflict ultimately aiding metals demand. An increased reliance on electric vehicles, further investments in renewable power, higher defence spending and growing competition to win the artificial-intelligence race are themes that would support copper demand, analysts including Samantha Dart said in a note.
The bank recently raised its end-2026 and average 2027 copper forecasts to US$13,735 a ton and US$13,800 a ton, respectively.
Other Metals Decline
All other industrial metals except zinc were lower, with aluminum down 2.9 per cent and nickel falling 2.3 per cent.
