Copper Dropped Remained Under Pressure From A Firmer U.S. Dollar.

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Copper Dropped Remained Under Pressure From A Firmer U.S. Dollar.
Credit: © Reuters.

Copper prices faced a decline of -0.81%, settling at 725, as the market grappled with pressure from a stronger U.S. dollar ahead of crucial economic data. The focus of investors shifted towards forthcoming inflation data from the United States, Japan, and Europe, shaping expectations for future rate movements. The firmer U.S. dollar and higher inventories in top consumer China contributed to the downward pressure on copper . Deliverable copper stocks on the Shanghai Futures Exchange (SHFE) reached 181,323 tons after the Lunar New Year holiday, hitting a near one-year high. 

Despite Beijing's efforts to support the debt-ridden property sector, China's new home prices extended declines in January, adding to concerns about industrial demand for base metals in the country. The International Copper Study Group (ICSG) reported a surplus of 20,000 metric tons in the global refined copper market in December, a significant shift from the 123,000 metric tons deficit in November. For the first 12 months of the year, the market showed an 87,000 metric tons deficit compared to a 434,000 metric tons deficit in the same period the previous year. World refined copper output in December stood at 2.39 million metric tons, while consumption reached 2.37 million metric tons. 

Technically, the market observed long liquidation, with a -3.21% drop in open interest to 3975. Copper has support at 723, and a breach below could test 721. Resistance is likely at 728.7, with a potential breakout leading to a test of 732.4.


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