FX.co ★ Copper Falls on Demand Concerns

Copper prices retreated toward $6.40 per pound on Wednesday, marking their lowest level in a month, as rising oil prices and global bond yields sharpened concerns over inflation and interest rates, clouding the demand outlook. Crude extended gains for a third straight session amid intensifying tensions between the US and Iran, complicating efforts to reopen the Strait of Hormuz. At the same time, global bond yields moved higher on mounting inflationary pressures and deteriorating fiscal conditions, reinforcing expectations that major central banks may soon be forced to raise interest rates. Tighter monetary policy and higher borrowing costs risk slowing global economic growth, thereby curbing demand for industrial metals such as copper. Even so, constrained global supply helped limit losses, with top producer Chile reporting a 9.4% year-on-year drop in output in July. In addition, traders continued diverting copper shipments to the US in anticipation of possible new import tariffs, as the White House has yet to announce its decision on the matter.