Copper Slides as Traders Take Profits and Dollar Firms

Copper prices retreated over the last 24 hours, reversing earlier gains as traders locked in profits and the US dollar regained strength. Official market data shows the spot price at $5.07 per pound on July 4, 2025, down 0.59% from the previous session.

The London Metal Exchange (LME) closed at $9,951.50 per metric ton, a 0.58% decline, while the Shanghai Futures Exchange (SHFE) settled at 80,540 yuan per metric ton, down 0.27%.

The market’s tone shifted as participants responded to macroeconomic signals and upcoming US jobs data. Many traders and funds reduced their exposure, leading to a wave of profit-taking.

This move followed a period of strong price performance, with copper having risen over 3% in the past month and nearly 9% year-on-year.

However, the latest session saw a clear pullback, with LME and SHFE volumes remaining robust—over 41,000 lots traded and open interest above 500,000 lots combined—indicating active repositioning.

A firmer US dollar contributed to the downward pressure. After a week of weakness, the greenback stabilized, making copper more expensive for buyers using other currencies.

This currency move, combined with uncertainty ahead of key US economic data, prompted many market participants to reduce risk exposure.

On the supply side, LME inventories remain historically low, but recent flows of metal into the US have increased domestic stocks. This shift reflects a mercantile strategy as traders anticipate possible tariffs and seek to benefit from price differentials.

Meanwhile, physical demand signals from China remain mixed. The Yangshan copper premium has edged higher, suggesting some import demand, but overall SHFE prices softened, reflecting cautious sentiment.

ETF flows into copper and mining funds have slowed compared to earlier in the quarter. The Sprott Copper Miners ETF’s net asset value and other copper-focused funds have seen less pronounced inflows, mirroring the market’s more cautious tone.

Copper Retreats Amid Profit-Taking and Macro Uncertainty

Technical analysis of the daily chart shows copper breaking below short-term support, with prices now testing the 50-day moving average. The MACD indicator has flattened, and the RSI has dropped toward neutral, signaling a loss of momentum.

Bollinger Bands show the price moving away from the upper band, indicating increased volatility and a possible shift to consolidation or further downside.

The four-hour chart confirms this trend, with the MACD turning negative and the RSI falling below 50, highlighting short-term weakness.

Volumes on both the LME and SHFE remain high, underscoring active hedging and repositioning as traders react to shifting fundamentals and macroeconomic uncertainty.

The market’s focus now turns to US jobs data and further currency moves, which could set the tone for copper’s next direction. Copper’s story today is one of retreat, as profit-taking and a firmer dollar outweigh tight supply and earlier optimism.

The fundamentals remain supportive, but technical signals and macro headwinds suggest caution as the market awaits its next catalyst.

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