
Copper prices dropped to two-week lows on Tuesday as worries about demand in top consumer China, partly fuelled by uncertainty about U.S. tariffs on imports, and a stronger dollar weighed on sentiment.
Benchmark copper CMCU3 on the London Metal Exchange (LME) was down 0.9% at $8,978 a metric ton, having earlier touched $8,977 a ton, the lowest since Dec. 3.
Already lacklustre copper demand in China is expected to come under further pressure if U.S. President-elect Donald Trump follows through with his threat to impose punitive tariffs on imports, which could trigger a trade war and subdue growth.
Further, A higher U.S. currency makes dollar-priced metals more expensive for holders of other currencies, which subdues demand..
The dollar is likely to hold firm next year as the market expects the Federal Reserve to cut U.S. rates only very gradually. It is expected to cut interest rates on Wednesday.
Adding to this, China’s yuan hovered near a 13-month low against the dollar, also added weakness in the metals prices, as weak economic data fueled expectations of further easing measures, while markets turned focus to the Federal Reserve’s rate decision this week. It was 8 pips lower than the previous session close, marking its weakest level since November 2023. The offshore yuan slipped to 7.2922 per dollar, down 0.03%.
Reuters reported Chinese leaders agreed to raise the 2024 budget deficit to 4% of GDP, a record high, while maintaining a 5% growth target. Analysts viewed the move as necessary to address local government debt concerns.
Before the market opened, the People’s Bank of China (PBOC) set the midpoint rate at 7.1891 per dollar, the weakest in a week but 951 pips firmer than Reuters’ estimate.
Recent economic data revealed unexpected weakness in consumption, adding to concerns over Beijing’s growth efforts amid external risks like Trump’s tariff threats.
Today, Fed policy meet due to release that could weight on the prices.
Technical Outlook of Copper Prices Falling Down

Copper prices dropped to a two-week low at 806.50, settling 0.85% lower at 8067.15 compared to the previous close of 814.25.
On the chart, prices breached the key support level of 810, forming a long bearish candlestick. A bearish pennant breakdown was also observed, while RSI (14) and its 9 SMA signal a negative crossover.
Technical indicators suggest a bearish momentum ahead. A decisive break below 802.50 could extend the decline toward 796-792.50.
However, failure to break below 802.50 may trigger a rebound toward 812-818.
Until then, Happy Trading!
Commodity Samachar Securities
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