British house prices stabilize in September, below expectations

Copper prices fell slightly (Wednesday) affected by the rise in the US dollar and the rise in oil prices, at a time when investors are awaiting the minutes of the US Federal Reserve meeting in search of indicators regarding the path of interest rates during the coming period.

The standard copper price for three-month delivery on the London Metal Exchange fell by 0.25 percent to reach $14,379 per metric ton by 03:00 GMT, according to Reuters.

The decline came in conjunction with an increase in the dollar index, which measures the performance of the US currency against a basket of major currencies, by 0.14 percent to 102.05 points. The rise of the dollar usually increases the cost of purchasing metals denominated in it for investors who hold other currencies, which puts pressure on demand and prices.

Copper has also come under additional pressure from higher oil prices. The rise in energy prices has led to growing fears of increased inflationary pressures, which may prompt central banks to tighten monetary policy and raise interest rates.

High interest rates typically negatively impact commodities linked to economic growth, such as copper, by slowing economic activity and reducing industrial demand.

Meanwhile, Asian stock markets fell, led by AI stocks, paring gains made earlier in the week, which had supported copper prices.

Despite the current pressures, the long-term outlook for demand for the red metal remains positive, as Standard & Poor's Global expects the expansion of the artificial intelligence and defense sectors to contribute to increasing demand for copper by about 50 percent by 2040.

Later Wednesday, investors are awaiting the release of the minutes of the Federal Reserve's September meeting, seeking to anticipate the possibilities of further increases in interest rates.

Aluminum continues to rise supported by supply concerns

On the other hand, aluminum was the most prominent gainer among industrial metals on the London Stock Exchange, as it rose by 0.25 percent, supported by supply risks associated with escalating tensions in the Middle East.

However, prices of the metal widely used in the construction, packaging and transportation sectors are still down by more than 17 percent compared to their highest level in four years, which they recorded last June, due to declining concerns about supplies, along with expectations of increased new production capacity in Indonesia.

As for the rest of the basic metals on the London Stock Exchange, zinc fell by 0.23 percent, lead by 0.13 percent, while nickel rose by 0.11 percent, and tin decreased by 0.09 percent.

The Shanghai Futures Exchange was closed due to a public holiday, and trading will resume on Thursday with the return of Chinese markets to work.

The Chinese Central Bank continued to increase its holdings of gold in September, extending its continuous purchases of the precious metal for the 23rd month in a row, according to official data issued on Wednesday, in an indication of Beijing’s continued trend to enhance its gold reserves despite the sharp fluctuations in prices this year.

The People's Bank of China's holdings rose to 77.47 million troy ounces of pure gold at the end of September, compared to 76.73 million troy ounces at the end of August.

China continued to buy gold despite the sharp fluctuations witnessed in its prices during the year, at a time when the prices of the precious metal fell by more than 6 percent during September.

The data showed that the dollar value of China's gold reserves fell to $323.52 billion at the end of September, from $350.08 billion at the end of August, as a result of the decline in prices despite the increase in the quantities held.

Gold in spot transactions was trading at about $4,147.47 per ounce by 02:44 GMT on Wednesday.

The Indian central bank raised the repo rate by 25 basis points to 5.5 percent, on Wednesday, in the first interest rate increase in nearly four years, as inflation risks rise and economic growth remains strong.

The Reserve Bank of India's decision came at a time when Indian markets are facing additional pressure from rising oil prices and tightening global financial conditions, in addition to the risks of rising food prices due to unfavorable weather conditions.

Sachidanand Shukla, chief economist at Larsen & Toubro Group in Mumbai, said that the 25 basis point rate hike was widely expected in the markets, but the central bank's change in position reflects an actual commitment to continue raising rates even if food or crude oil prices decline.

Radhika Rao, chief economist at DBS Bank in Singapore, said that the October decision reflects that the inflation risks associated with the economic cycle are no longer limited, noting that the change in monetary policy stance also confirms the Monetary Policy Committee’s direction towards greater tightening.

She added that the rise in oil prices, the tightening of global financial conditions, and the risks of food inflation resulting from unfavorable weather conditions, prompted policy makers to strengthen the credibility of the central bank in combating inflation before these risks become more entrenched.