FX.co ★ Copper Declines as Tech Selloff Resumes

Copper futures edged down toward $6.40 per pound on Tuesday, resuming their decline as renewed selling in technology stocks—driven by persistent concerns over lofty artificial intelligence valuations—weighed on the metal. Copper is a critical component of the global AI buildout due to its extensive use in data centers, power grids, and broader electrical infrastructure, making its price highly sensitive to shifts in sentiment toward the technology sector.

At the same time, investors continued to price in the possibility of a Federal Reserve rate hike in December, amid inflationary pressures fueled by higher energy costs linked to the conflict in the Middle East. That said, signs of diplomatic progress between the US and Iran helped push oil prices lower, easing some of the upward pressure on inflation expectations.

On the supply side, production constraints lent some support to copper prices. Output in Chile—the world’s largest producer—fell in the third quarter to its lowest level in at least two decades, and the country is projecting only a modest recovery in production next year.