FX.co ★ Copper Extends Pullback Along with Base Metals

Copper futures in the US fell below $5.75 per pound on Tuesday, retreating from the one‑month high of $6 reached on February 27th, as base metals came under pressure amid escalating geopolitical tensions and a stronger US dollar. The ongoing conflict involving Iran and US allies has intensified since the weekend, with Iranian forces striking key energy infrastructure in the Middle East and threatening to attack any vessel or tanker passing through the critical Strait of Hormuz.

These developments have driven sharp increases in global energy prices, bolstering the dollar both on expectations of a potentially more hawkish stance from the Federal Reserve and on heightened demand for safe-haven assets. Higher energy costs, in turn, risk weakening global manufacturing activity, weighing on demand for base metals such as copper.

Even so, copper prices remain not far from their record high of $6.20 per pound set at the end of January, supported by strong speculative buying and constrained supply. Additionally, expectations of forthcoming stimulus measures from the Chinese government have underpinned sentiment and helped sustain demand.