Copper Price Volatility Rises Ahead of US Inflation Data and Fed Speech
The copper market has seen high volatility in recent sessions due to mixed indicators. On one hand, supply concerns and strong exports continue to support a long-term bullish outlook for the red metal. Mining disruptions in top producers like Chile have added to the bullish sentiment, along with positive demand expectations.
However, the surge of US copper imports has eased some pressure off copper prices. The country's stockpile now exceeds 1 million tonnes, built largely on the bet that Trump's administration may impose levies on refined copper imports. Despite investors remaining cautious over the possible taxes, the White House has yet to make any announcement on the matter.
The increased copper stockpiles in the UK and China warehouses have further eased some pressure off copper prices. This is in addition to the sharp narrowing of LME backwardation. On-warrant copper inventories rose by 63,000 tonnes across Europe, the US, and Asia; equating to an over 50% surge.
The market will likely react to the Fed's Chair speech and performance of the US dollar amid persistent economic uncertainties. As a conventional economic bellwether, Dr Copper moves in tandem with the global economic health. The persisting geopolitical tensions in the Middle East and China's property crisis continue to impact copper price movements.
Copper price may continue to find support near the 25-day EMA at $6.50. A decline past that zone will likely have the asset bounce off the steady support along the 50-day EMA at $6.43. On the upside, a resistance level worth watching is $6.65.