Copper prices climbed on Tuesday, trading around $10,860 a ton, after remaining flat in the previous session. This increase is attributed to near-term supply tightness and heightened anticipation of another interest rate cut by the US Federal Reserve in the upcoming month.
Confidence in further monetary easing was bolstered after Federal Reserve Governor Christopher Waller publicly advocated for a rate reduction. Waller's reasoning for this stance was based on a soft US labor market, suggesting that economic conditions warrant a more accommodative monetary policy.
This sentiment contrasts with broader industrial metals, which saw declines on Friday as traders considered the potential negative impact of higher interest rates on demand. The Federal Reserve's recent "hawkish hold" on interest rates, maintaining them in a target range of 3.50% to 3.75% with three dissenting votes for a rate hike, has introduced uncertainty into the market. Futures markets initially priced in a 77% chance of a September rate increase, later settling closer to 57%, with about 35 basis points of hikes expected by the end of 2026, according to the CME's FedWatch tool.
