Copper futures gained over 0.5% on Tuesday after rising more than 2% in the previous session. The rally was fueled by a weaker US dollar, driven by reports suggesting a potentially softer stance on tariffs by the Trump administration. However, President-elect Trump later denied these claims, tempering market enthusiasm.
A weaker dollar makes dollar-priced metals cheaper for non-US investors, boosting copper demand.
China’s Economic Policies: Optimism about China’s growth outlook supported prices, as Beijing pledged more proactive” macroeconomic measures, including lower interest rates.
Supply Concerns: Tight copper concentrate supplies due to operational disruptions provided additional support.
Benchmark copper (CMCU3) on the London Metal Exchange (LME) rose 1.3% to $8,994.50 a metric ton. Despite gains, copper has remained near $9,000 since the US elections in November, reflecting market caution over US tariff policies and Chinese demand concerns.
While copper prices are benefiting from macroeconomic factors, including a weaker dollar, uncertainties surrounding US tariff policies and China’s industrial demand could limit further gains. Investors now await key US labor market data this week to gauge the Federal Reserve’s monetary policy direction, which will influence the dollar and copper prices.
Copper prices witnessed an intraday gain of more than half percent yesterday. Prices touched a day’s high of 819.20 before settling at 816.65.
Since the start of the month, prices have shown a recovery rally from the low of 789.55. Yesterday, prices made a high of 819.20, reflecting an increase of 2.04%.
The daily price action is forming a triangle pattern, further RSI 14 and its 9 SMA is giving an bullish crossover, both of which are indicates that prices may soon test the next immediate resistance at 825.40–828.00
On the downside, support is seen at 812.50-810. A breach below this level could lead to a retreat towards 807.50–802.50.
Until then, Happy Trading!
Commodity Samachar Securities
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