Copper prices rose in Shanghai today after Beijing took strong measures to support the stock market, however concerns about another US interest rate hike curbed gains.

Copper October futures due in Shanghai rose 0.3% to 69,060 yuan a tonne, after a 1.1% surge last week.

Both the stocks and bonds markets in London closed today for a summer bank holiday and will reopen tomorrow.

China cut taxes on stock exchanges by half starting today to bolster the market. 

China continues to face challenges as industrial profits declined for the seventh straight month, while dollar also impacted copper prices as prospects of another US interest rate hike increase. 

It's expected copper prices will continue to trade sideways for some time as inventories increase slightly , while investors worry about the stronger dollar.

Fed Chair Jerome Powell recently opened the door for further US policy tightening to control inflation.

Recent weekly copper inventory data showed a 3.5% increase last week in Shanghai, while still remaining at 10-month lows. 

At the Shanghai Exchange, aluminium rose 0.1% to 18570, yuan a tonne, while zinc rose 0.7% to 20,685 yuan, as tin slipped 0.2% to 21,5800, while lead fell 0.1% to 16,400 yuan.

Otherwise, the dollar index stabilized at 104.09 as of 15:31 GMT, with a session-high at 104.2, and a low at 103.9.

On trading, copper December futures rose 0.2% as of 15:29 GMT to $3.79 a pound.

International benchmark Brent rose in European trade on Monday for the second straight session off four-week lows as China takes stimulus measures to support the weakening economy, which could boost fuel demand in China. 

Prices are also boosted by a stalling dollar against a basket of major rivals, which makes dollar-denominated commodities cheaper to holders of other currencies.

Brent Today

Brent rose 0.6% to $84.65 a barrel, with a session-low at $83.62, after rising 1.7% on Friday, the first profit in five days away from a one-week trough at $81.65.

Brent prices lost 0.85% last week, the second weekly loss in a row on global demand concerns.

Chinese Stimulus 

The Chinese government announced a steep cut by 50% on stock trading taxes to boost the markets.

Such measures, in addition to the storm barrelling towards southeastern USA, Brent is expected to edge above $85 a barrel.

The Dollar

The dollar index fell 0.2% on Monday away from an 11-week nadir at 104.45 against a basket of major rivals. 

Now markets await US jobs data which are expected to provide more clues on the future prospects of US interest rates.

Gold prices fell in European trade on Monday for the second session away from a two-week high on profit-taking, following bullish remarks by Fed Chief Jerome Powell in Jackson Hall.

Such remarks combined with other recent bullish remarks by Fed officials bolstered the case for another US interest rate hike this year.

Gold Prices Today

Gold prices fell 0.1% to $1,913 an ounce, with a session-high at $1,917, after losing 0.1% on Friday, the first loss in five days away from a two-week high at  $1,923. 

Gold prices rose 1.4% last week, the first weekly profit in a month on short-covering and haven demand.

Powell

Fed Chair Jerome Powell said in Jackson Hall the Fed will move cautiously if further policy tightening is required, and otherwise will maintain interest rates unchanged in wait for more data.

Powell asserted the Fed's goal to bring inflation back to the 2% medium-term, target.

Cleveland Fed President Loretta Mister said on Saturday that overcoming inflation will likely require another interest rate hike.

US Rates

After such remarks, chances for a 0.25% interest rate hike by the Fed in September stood at 20%.

Odds for a 0.25% Fed interest rate hike in November surged to 62%.

The SPDR

Gold holdings at the SPDR Gold Trust remained flat on Friday at 884.04 tonnes, the lowest since January 2020.

Euro rose in European trade on Monday against a basket of major rivals, while trying to recoup from a ten-week trough against US dollar, and on track for the first profit in three days after ECB President Christine Lagarde's speech at Jackson Hall.

Lagarde said the ECB will carry on tightening monetary policies and raising interest rates to bring inflation back to 2%, in turn bolstering odds for a 0.25% interest rate hike by the ECB in September.

EUR/USD rose 0.2% to 1.0818, with a session-low at 1.0792, after losing 0.15% on Friday, the second loss in a row, plumbing a ten-week trough at 1.0777. 

EUR/USD lost 0.7% last week, the sixth weekly loss in a row, and the longest such streak of weekly losses since April 2018.

Such losses came amid concerns about a potential European economic recession, which might force the ECB to halt its efforts to tighten policies. 

Lagarde

European Central Bank President Christine Lagarde said in Jackson Hall the ECB will decide the appropriate level for interest rates and will maintain them there until inflation is brought back to 2%.

She added it's important for central banks to provide support for economies and stabilize prices, as high price volatility will have a damaging economic effect in the medium term.

She also warned that if global supplies became less flexible, including the labor market, prices are expected to play a larger role in maintaining flexibility.