Copper Extends Rally on Tech Stock Surge and Weaker Dollar

Copper prices extended their gains for a third consecutive session on Tuesday, driven by a rally in stock markets, a weaker dollar, and optimistic demand forecasts. The benchmark three-month copper contract on the London Metal Exchange rose 0.1% to $14,420 per metric ton, following a 1.1% increase the previous day.

Ewa Manthey, commodities strategist at ING, noted that copper is benefiting from the positive sentiment in equity markets, particularly the surge in tech stocks. This rally has fueled optimism about future demand for copper in data centers and power infrastructure. Additionally, S&P Global predicts that growth in the AI and defense sectors will increase copper demand by 50% by 2040.

The LME copper price has climbed 16% this year but has retreated from its record high of $14,875 reached on September 10. Over the past three sessions, the metal has found technical support at the 50-day moving average of $14,253. The Shanghai Futures Exchange remains closed for China’s National Day and will reopen on October 8, when traders will be watching for the return of Chinese buyers.

A weaker dollar index has also supported industrial metals, making dollar-denominated commodities more affordable for buyers using other currencies. Other metals saw gains, with LME aluminum up 0.7% to $3,148 per ton, zinc climbing 0.6% to $3,765 per ton, and tin rising 0.1% to $54,390 per ton. However, nickel lost 0.1% to $15,700 per ton.