Copper is surging once again as two powerful forces converge: a weakening US dollar and fresh monetary easing from China. With investors eyeing both currency shifts and policy moves, the red metal is finding renewed momentum in global markets.
Benchmark copper prices in London climbed by roughly 0.5% to around $9,570 per tonne, lifted by a softening dollar that made metals cheaper for non-dollar buyers. This currency-driven tailwind coincides with a surprise move from China’s central bank, which lowered its key lending rate for the first time since October. In a show of coordinated support, major Chinese banks also reduced deposit rates, underscoring Beijing’s intent to reignite domestic demand and stabilise growth.
These macroeconomic manoeuvres have injected optimism into an otherwise cautious market. Copper prices, which had held support around the $9,500 level, are now testing upside resistance levels. If momentum continues, traders are eyeing a potential breakout towards the $9,950 range. The technical landscape, combined with a more accommodative Chinese monetary policy, suggests this rally may have legs—provided global trade tensions remain in check.
China’s actions are being interpreted as a strategic response to mounting pressure from weaker exports and softer domestic spending. By lowering the cost of borrowing, policymakers are aiming to stimulate investment and infrastructure development—both of which are copper-intensive activities. This shift is especially significant for investors, as China accounts for more than half of global copper consumption.
Other base metals followed copper’s lead. Aluminium gained approximately 0.6%, trading near $2,488.5 a tonne. Zinc, lead, and nickel also posted modest advances, reflecting improved sentiment across the broader industrial metals complex. In Shanghai, copper futures mirrored the global trend, ticking up by 0.4% to reach 78,150 yuan per tonne, or roughly $10,840.
The dollar’s two-day decline added fuel to the fire, enhancing the purchasing power of overseas buyers and reinforcing a bullish backdrop for commodities. The inverse correlation between copper and the dollar is once again on display, magnified by the policy divergence between the US and China. While the Federal Reserve remains cautious on rate cuts, China is clearly pressing ahead with stimulus, giving its domestic metals sector a relative advantage.
Still, caution persists. The recent truce in trade tariffs between the US and China has eased short-term tensions, but investors are wary of the longer-term implications. A sudden escalation could once again suppress demand expectations and derail price progress. For now, however, the blend of weaker dollar dynamics and China’s policy pivot offers a supportive setup for copper and related assets.
For investors looking to capitalise on macro-driven trends, copper is once again proving its relevance as a barometer of economic health and policy direction. The convergence of favourable currency movements and a clear stimulus signal from the world’s largest consumer has opened a fresh chapter for industrial metals.
ARC Minerals Ltd (LON:ARCM) is a dynamic exploration and prospect generation company, forging partnerships with major mining companies, in its quest to discover and develop Tier 1 copper deposits.
