Copper ticks higher as Fed rate hike bets fade

Copper extended its gains on Monday, with the three-month contract on the London Metal Exchange trading 0.6% higher at $14,346 per metric ton by 0951 GMT, according to Business Recorder. The move came as expectations of another US Federal Reserve rate increase faded, easing pressure from a firm dollar while equities also edged higher.

The metal had hit a record $14,875 on September 10 on worries over limited supply beyond the US, before losing ground last week. Expectations for an October Fed increase dropped once US jobs figures came in weaker than forecast, and the CME FedWatch tool now indicates an 18% chance of a hike at this month's meeting, compared with 71% a week earlier.

Higher interest rates typically slow economic activity and reduce demand for industrial metals such as copper, while a stronger dollar makes the metal dearer for buyers using other currencies. Attention now turns to China, the top metals consumer, which returns on Thursday, with buyers' fourth-quarter appetite to be assessed. Sandeep Daga of Metal Intelligence Centre said Chinese inventories were light and domestic demand looked soft, although smelter maintenance halts are scheduled.