Copper Market Takes Breather After Trade Deal Rally as Technical Signals Mixed

Copper prices edged lower Wednesday morning after Tuesday’s significant rally, with COMEX copper trading at $4.7052 per pound, down 0.32% from the previous close.

On the London Metal Exchange (LME), three-month copper contracts traded at $9,586 per tonne, falling 0.14% as traders assessed recent market developments. Tuesday marked an impressive session with COMEX copper surging 10.30 cents (2.25%) to close at $4.6815 per pound.

This represented the largest single-day percentage gain since April 22, pushing prices to their highest settlement value since May 6. LME copper also showed strength, ending Tuesday at $9,599.50 per tonne.

The weekend announcement of a temporary trade agreement between the United States and China fueled yesterday’s rally. This accord includes reciprocal tariff reductions to 30% and 10% for a 90-day period, easing tensions between the world’s largest economies.

US Treasury Secretary Scott Bessent called the agreement “a very good framework” for future negotiations. Better-than-expected US inflation data provided additional support for copper prices.

The Consumer Price Index cooled to 2.3% year-on-year in April, reaching its lowest level since February 2021. This unexpected moderation weakened the US dollar index, traditionally a bullish factor for dollar-denominated commodities like copper.

Technical indicators present a conflicting outlook for copper prices. Current price action shows a sideways trading range with significant resistance at $4.9200.

The 50% Fibonacci correction level at $4.6600 forms another barrier to upward movement. Short-term simple moving averages suggest buying opportunities, while the 200-day SMA indicates selling pressure at $4.6803.

Other technical signals remain mixed. RSI readings show bearish momentum at 30.44, potentially indicating oversold conditions. However, MACD displays a bullish signal at 3.17, and stochastic oscillators register at 0.46, deep in oversold territory.

These contradictory indicators reflect market uncertainty following recent gains. Shanghai copper prices held relatively steady amid the global fluctuations.

The Shanghai Futures Exchange (SHFE) copper contract inched up 0.1% to 78,090 yuan ($10,859.86). Chinese demand continues showing resilience despite ongoing property market challenges and broader economic concerns.

Supply fundamentals present a complex picture for market participants. The International Copper Study Group projects a global surplus of 289,000 tonnes in 2025.

Yet ANZ forecasts a market deficit of 500,000 tonnes with demand growth of 3.5% year-over-year, highlighting analytical disagreements on market balance.

Industry experts remain divided on copper’s near-term outlook. Kincora Copper CEO Sam Spring describes the market as “at a very interesting junction and looking for direction.”

Meanwhile, Tempest Minerals Managing Director Don Smith warns that “declining copper supply is a genuine threat to society.” The expected trading range for today remains between $4.4500 and $4.6600.

Technical analysts maintain a cautiously bearish near-term forecast despite yesterday’s impressive gains. Traders continue monitoring US-China trade developments and global manufacturing data for further directional cues.

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