Copper Jumps As AI Sentiment Improves
Copper Bouncing Back
Copper prices are bouncing back firmly today with the futures market up around as AI sentiment rebounds. The move higher comes despite the strength we’re seeing in USD today, which would typically act as a headwind for higher copper prices. The demand has been strongly tied toe rebound in AI sentiment following Anthropic’s IPO this week which has revived investor excitement around the AI sector. Prior to this, AI stocks had been struggling as recent funding fears and some earnings misses from big tech names weighed on sentiment.
AI Demand
Demand from the AI sector has been a big driver of the upside we’ve seen in copper this year given its usage in chip making, battery development and data centres. As such, the recent rout in AI stocks hit copper prices hard, reflecting just how sensitive the metal has become towards the AI sector. Looking ahead this week, traders will be watching incoming earnings news from further big tech names with Samsung, Amazon, Alphabet & Microsoft all on deck.
October FOMC
We also have the October FOMC tomorrow which could cause a firm shift in markets if the Fed either disappoints Dollar bulls or gives a clear hawkish signal for December, amplifying the current USD rally. In the latter scenario, the rebound in copper prices could be blunted if SXY breaks out to fresh highs while a drop lower in USD could instead propel copper prices back to highs.
Technical Views
Copper
The sell off in copper has stalled for now with price rebounding higher off the 6.3750 level. While this support zone holds, focus is on a fresh push higher with an initial challenge of the 6.7190 level the first focus for bulls ahead of the 6.8615 highs.
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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.