Copper Prices Fall as US Tariff Concerns Rise, Technical Indicators Flash Warning

Copper prices dropped notably to approximately $5.63 per pound early on July 29, 2025, reflecting market anxiety over upcoming U.S. tariffs.

According to official commodity trading data, the price fell about 0.45% from the previous session, highlighting market caution. Prices fluctuated significantly in the past 24 hours, falling as low as $5.42 per pound during intraday trading.

Investors reacted strongly to looming tariffs proposed by the U.S. administration, set to impose a steep 50% tax on copper imports beginning August 1. The tariff news triggered considerable selling pressure.

Market fundamentals compounded this negative sentiment. Chile, a major copper producer, recently increased its 2025 copper price forecast to $4.28 per pound.

The country cited reduced output from significant mining operations, especially the Collahuasi mine, driving longer-term price strength despite short-term uncertainties.

The technical picture also influenced trading patterns. The four-hour chart showed copper sharply declining after encountering resistance near $5.71. The Relative Strength Index (RSI), a key momentum indicator, dropped sharply to around 32, nearing oversold territory.

Simultaneously, the Moving Average Convergence Divergence (MACD) turned negative, signaling increased bearish momentum. On the daily chart, copper’s overall uptrend remained intact but faced increasing downward pressure.

The daily RSI fell from a recent peak of 71 to 59, indicating waning bullish sentiment and caution among traders. The Global Liquidity Index NDQ, indicated by a prominent yellow line on charts, underscored weakening liquidity.

Declining liquidity further confirmed market hesitancy, influencing investors to avoid significant commitments until clearer signals emerged.

Exchange-Traded Funds (ETFs) linked to copper displayed neutral activity with no significant inflows or outflows over the past day. This neutrality indicates a holding pattern as traders await further clarity on tariff implementation details.

Copper’s short-term direction now hinges critically on the $5.32 per pound support level. Should prices hold above this level, analysts expect stabilization and possibly a recovery.

However, breaching this support could open doors to more severe drops towards $5.07 and potentially even $4.72 per pound. With trade policy uncertainties dominating market sentiment, copper traders will closely monitor official announcements.

Particular attention will be on the ongoing U.S.-Chile and U.S.-EU tariff negotiations. Any clear outcomes or extensions on tariff exemptions could shift market momentum significantly in the coming sessions.

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