Copper prices slip as inflation data fuels Fed rate hike expectations

Copper futures fell as much as 0.6% on the London Metal Exchange, extending losses from the previous week as investors reassessed monetary policy trajectories following the latest US inflation report. The decline marked a reversal after several weeks of gains for the base metal, signalling renewed caution among traders regarding demand prospects.

The inflation data from the United States has reinforced market expectations that the Federal Reserve may raise interest rates further to combat persistent price pressures. Higher borrowing costs typically weaken demand for industrial metals like copper, as they increase costs for manufacturers and consumers, potentially slowing economic activity across major markets.

For India and other emerging economies in South and Southeast Asia, movements in copper prices carry significant implications. The metal is crucial for construction, electronics, and renewable energy infrastructure projects that are key to regional development plans. Currency fluctuations tied to US monetary policy changes can also affect the cost of copper imports for regional buyers.

Market participants remain cautious about the outlook for metals demand amid broader economic uncertainty. The weakness in copper comes as investors evaluate the balance between inflation concerns and growth headwinds, with particular attention to how central banks worldwide respond to evolving economic conditions in the coming weeks.