Copper Sinks As Tariff Uncertainty Swells
Copper Selling Continues
Copper prices remain under heavy selling pressure on Tuesday with the futures market extending the reversal from last week’s record highs. The market is now down 8% from those highs. The decline is being attributed in part to news that the US is reconsidering plans to impose fresh tariffs on refined metals imports, and partly due to the rebound in USD amidst rising Fed tightening expectations ahead of the FOMC this week.
Tariff Uncertainty
On the tariff front, copper traders are responding to a recent report from Reuters citing sources saying that the US govt has not yet made a decision on whether to tariff refined metals imports. Expectations that the tariffs would be implemented soon have driven a spike in buying in recent months as manufacturers looked to boost inventories ahead of the levies being introduced. However, with those tariffs now in question we’re seeing a heavy long squeeze in copper. If the tariffs are ultimately cancelled or postponed, this could drive a much heavier sell off similar to what we saw in 2025 when this same narrative of tariff cancellation played out.
Hawkish Fed Expectations
Alongside the shift in expectations over tariffs, copper is also being hurt by hawkish Fed expectations and the subsequent rebound in USD. Strong NFP and CPI data has seen traders moving to price in a hike at tomorrow’s September FOMC. If the Fed is seen delivering a hawkish message, signalling the prospect of further tightening, this could see USD pushing further higher, ragging copper down deeper near-term.
Technical Views
Copper
The sell off in copper has seen the market breaking down below the rising trend line from YTD lows, now correcting deeper within the broader bull channel. Next support to watch is the 6.2845 level and 6.1090 below which is the key pivot for bulls to defend in order to prevent a deeper sell off.
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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.