Copper leads base metals lower as Middle East tensions flare up

Business Recorder reported that base metals retreated on Wednesday, with copper and zinc leading the losses as fighting between the United States and Iran intensified. Traders worried that higher oil prices could feed into inflation. By 1007 GMT, three-month copper on the London Metal Exchange had fallen 1% to $14,133 per metric ton, after dipping to $14,092, its weakest since August 21.

Copper has now declined for a second session after reaching a seven-month high of $14,441.50 on Tuesday. A firmer dollar, which climbed to its strongest level in two weeks, and growing expectations of a Federal Reserve rate increase in September are weighing on the metal. A stronger greenback also makes dollar-priced metals more expensive for buyers using other currencies. SP Angel analyst John Meyer said a Fed hike was becoming more likely.

Zinc dropped 1.7% to $3,856 after reaching a four-year high of $3,990 on Tuesday. LME tin fell 0.9% to $54,090, nickel eased 0.4% to $16,595, and aluminium lost 0.7% to $3,256.50. Daily LME figures showed small inflows of copper and zinc into registered warehouses, which narrowed cash premiums over three-month contracts.