Copper prices edged lower on Wednesday as investors remained cautious ahead of the U.S. Federal Reserve's interest rate decision, while signs of easing supply tightness in China, the world's largest copper consumer, also weighed on sentiment. In contrast, aluminium prices gained support as renewed fighting in the Middle East raised concerns over potential supply disruptions.
Benchmark three-month copper on the London Metal Exchange (LME) fell 0.4% to $13,631 per metric ton by 1002 GMT, although the contract remained above its 50-day moving average of $13,576, a key technical support level watched by traders.
The U.S. dollar hovered near one-month highs as market participants awaited the Fed's policy announcement for further guidance on the interest rate outlook. A stronger dollar typically makes dollar-denominated metals more expensive for buyers using other currencies, which can weigh on demand. Markets were pricing in roughly a 30% probability of a 25-basis-point interest rate increase, contributing to subdued trading activity across base metals.
