Copper Plunges As Traders Await Tariff News
Copper Tariff Decision Pending
Copper prices are down sharply today as traders await a report from the US Commerce Dept determining whether or not import tariffs will apply to refined copper tariffs. The metal is also being weighed upon by fresh strength in USD this week as traders look ahead to Fed chairman Warsh’s Sintra speech later today. This will be the first time hearing form the new Fed chair since the June FOMC and risks appear skewed in favour of fresh Dollar strength given the hawkish shift we saw at that meeting. We’ll also get the latest ADP employment figure today ahead of the headline NFP data set tomorrow. Any strength in today’s data, especially if combined with hawkish comments from Warsh, should feed into a stronger US Dollar ahead of tomorrow’s data, keeping copper prices skewed lower. If we then see a strong print in the NFP tomorrow, USD should end the week at fresh YTD highs, putting copper under heavier pressure into next week.
Bullish Goldman Forecast
Interestingly, Goldman Sachs issued a note this week expressing its view that the ongoing US/Iran conflict should ultimately lead to stronger demand for copper. Goldman forecasts that electric vehicle adoption should increase in light of the oil price shocks this year leading higher spending in the renewable energy sector alongside higher defence spending, all leading to stronger demand for copper.
Technical Views
Copper
The rebound in copper failed into a test of the 6.2845 level with price since turning lower again. Copper is now retesting the key 6.1090 level which, if broken, opens the way for a much deeper run down toward the 5.8550 level next.
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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.