Copper Surges on Tariff Buying
Copper Pushing Higher
Copper prices are pushing higher today, driven by a weaker US Dollar, ongoing market tightness and tariff driven speculation. Copper futures have broken out to fresh highs for the month and are now very close to testing the record highs. The move higher comes amidst a continued ramp up in buying activity ahead of anticipated US tariffs. Sellers are continuing to prioritise diverting shipments to the US ahead of possible tariffs on the refined copper market. This activity has led to record drawdowns in stocks at LME warehouses in the UK. Meanwhile, the premium on US copper prices has continued to drive speculative activity though it has not yet been confirmed by the US administration whether it will go ahead with the proposed levies.
Softer US Dollar
At the time, weakness in USD is also helping boost demand for copper. Despite the lift in Fed tightening expectations on the back of Friday’s NFP beat, USD has remained skewed lower as traders wait for this Friday’s all-important CPI release. For copper bulls, the ideal scenario would be an undershoot of the 3.4% target, which should drive September hike pricing back under the 50% level, and USD firmly lower. In this scenario, a breakout to fresh highs is likely for copper futures. On the other hand, if we see the target forecast satisfied or outperformed on Friday, this could cap the rally in copper for now as USD and September hike expectations soar.
Technical Views
Copper
Copper prices are pushing higher again within the broad bull channel and now testing record resistance at the 6.8615 level. With momentum studies bullish, focus is on a fresh push higher. The local bull trend line support and 6.5830 are the key support areas to note with the bullish outlook only changing near-term on a break below 6.5830.
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With 10 years of experience as a private trader and professional market analyst under his belt, James has carved out an impressive industry reputation. Able to both dissect and explain the key fundamental developments in the market, he communicates their importance and relevance in a succinct and straight forward manner.