Copper’s Bearish Momentum Continues as Prices Test Critical $4.40 Support

Copper prices continued their downward trend this morning, trading at 4.4047 per pound as of 06:57 UTC, representing a decline of 0.0464 (-1.04%) for the session.

This latest movement extends the metal’s significant correction from its early April highs near 5.2000, with prices now hovering just above the 4.4000 psychological level.

Yesterday witnessed moderate price stabilization following a turbulent period, with copper managing a slight recovery after reaching lows around 4.2000 earlier this week.

The metal’s price has been under significant pressure since reaching its peak in early April, with the COMEX contract having fallen dramatically from above 5.0000 just a week ago.

The LME Copper Cash-Settlement price declined to 8,830.50 on April 4, dropping sharply from 9,397.00 the previous day, representing a continuation of downward momentum in global copper benchmarks.

This price action represents a stark reversal from early March trends when copper was surging on expectations of higher AI-related demand and inflation concerns.

Trade War Impact

The primary factor driving copper’s decline has been the escalating global trade tensions, particularly between the United States and China. President Trump’s implementation of sweeping tariffs, including a massive 104% levy on Chinese imports, has severely impacted industrial commodities.

China’s retaliatory announcement of 84% tariffs on all U.S. goods, effective today (April 10), has further intensified market concerns about global economic growth.

“When it was least expected, the market conformed to our premise but made sure to shake our nerves and complicate our trades first. Nevertheless, the nearly immediate $1.30 retreat was only made possible by the irrational rally that preceded it,” noted market analysts regarding copper’s recent decline.

Gold Market Correlation

In contrast to copper’s weakness, gold has emerged as a clear beneficiary of the current geopolitical uncertainty. Gold prices rallied over 3% yesterday to $3,082.15 an ounce, recovering from previous sessions’ losses.

This movement highlights the divergence between industrial metals like copper and safe-haven assets during periods of economic uncertainty.

“Ultimately gold continues to be seen as a hedge against instability here. We got a situation where tariffs are becoming a big problem, and you have inflationary expectations going higher, and that’s manifested by higher yields,” explained Bart Melek, head of commodity strategies at TD Securities.

ETF Flows and Investment Trends

Gold-backed ETFs registered their largest quarterly inflow in three years during Q1 2025, with 226.5 metric tons valued at $21.1 billion flowing in.

This influx increased total holdings by 3% to reach 3,445.3 tons by the end of March 2025, approaching the all-time record of 3,915 tons established in October 2020.

U.S.-listed funds dominated these inflows, contributing 133.8 tons in the first quarter (59% of global inflows), while European-listed funds garnered 54.8 tons (24%).

This strong investment demand for gold contrasts sharply with the selling pressure observed in industrial metals like copper, highlighting the market’s risk-off sentiment.

Technical Analysis

From a technical perspective, copper’s chart indicates a clear downtrend since early April. The metal has broken below several key support levels, with prices now consolidating just above the 4.4000 mark. The chart displays a series of lower highs and lower lows, confirming the bearish momentum.

The price action shows immediate resistance around 4.5000, with stronger resistance at the 4.7000 level. Support appears to be forming around 4.2000, which temporarily halted the decline earlier this week.

Moving averages are in a bearish configuration, with shorter-term averages crossing below longer-term ones, signaling continued downward pressure. Trading volumes have increased during selling phases, indicating strong bearish conviction.

Regional Market Dynamics

In the Middle East, copper production contracted slightly to 769,000 tons in 2024, a decrease of 3.1% compared to the previous year. Iran remained the largest producer in the region with 263,000 tons, comprising approximately 34% of total volume, followed by Turkey (131,000 tons) and Iraq (110,000 tons).

Looking ahead, the Middle East copper market is projected to grow at a modest CAGR of +0.4% in volume and +1.6% in value from 2024 to 2035, suggesting potential long-term stability despite current volatility.

Future Outlook

Market participants are closely watching several key events that could impact copper prices in the coming days:

1. Today’s implementation of China’s retaliatory tariffs, which could further disrupt global trade flows

2. The release of FOMC meeting minutes, which may provide insights into potential rate cuts that could support commodity prices

3. Tomorrow’s U.S. Consumer Price Index data, which will influence inflation expectations and Federal Reserve policy decisions

The market consensus suggests continued volatility in copper prices as global trade tensions unfold, with potential stabilization if trade conflicts de-escalate or central banks signal more accommodative policies.

“If this area holds, as expected, it could be a sign of imminent strength in risk assets once the excess is worked out of the system,” noted analysts regarding copper’s potential to find support around current levels.

Today will be critical in determining whether copper can maintain its fragile stability or if further selling pressure will emerge as market participants digest the latest developments in the ongoing trade disputes.

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