Copper futures climbed above $4.75 per pound on Tuesday, marking their highest level in over two weeks, as a weaker US dollar and escalating political and economic concerns in the United States boosted demand for commodities.
Copper climbs higher on weaker dollar
The dollar’s slide came as President Donald Trump intensified pressure on the Federal Reserve, once again calling for immediate interest rate cuts and openly criticizing Fed Chair Jerome Powell. The move fueled investor fears over the Fed’s independence and raised broader concerns about the stability and credibility of US economic policymaking, prompting a flight into dollar-denominated assets like copper.
Meanwhile, global market sentiment remained fragile amid the ongoing deterioration in US-China trade relations. Beijing accused Washington of "weaponizing" tariffs for political purposes and warned other countries against conceding to American demands, heightening fears of a prolonged and destabilizing trade war. The deteriorating backdrop is amplifying worries about future supply chain disruptions and broader global economic slowdowns, factors that traditionally weigh on industrial metals but have paradoxically added speculative interest in copper this time around, as traders bet on potential supply constraints.
Tariffs impact on copper
Copper, often seen as a bellwether for the global economy due to its widespread industrial use, also found support from speculation that Washington’s tariff measures might soon extend to critical raw materials, including copper imports. Such a move could further tighten supply channels, especially if China— the world's largest consumer of copper — responds with countermeasures that disrupt global trade flows.
Adding to the bullish momentum, ongoing supply-side risks remained in focus. Labor negotiations at major South American copper mines and concerns over declining ore grades in key producing regions have reignited fears of future supply shortfalls. This supply uncertainty, coupled with resilient demand projections tied to green energy projects and infrastructure initiatives worldwide, is helping to underpin copper prices even against a backdrop of heightened geopolitical risk.
Market analysts caution that while copper’s short-term trajectory appears positive, the metal remains vulnerable to sharp corrections if trade tensions escalate further or if the global economic slowdown becomes more pronounced than currently anticipated.
