FX.co ★ Copper Holds Gains on Dollar Weakness

Copper futures remained steady around $5.94 per pound on Monday, following an almost 3% increase in the prior session, buoyed by a weakening dollar that enhanced demand for both base and precious metals. When the dollar softens, commodities priced in U.S. dollars, such as copper, gold, and silver, become more cost-effective for buyers using other currencies. Investment demand has also seen an uptick, with Chinese merchants distributing 1-kilogram investment-grade copper bars, despite facing challenges in the secondary resale market. Moreover, physical buyers are expediting their copper deliveries in anticipation of the Lunar New Year holiday in China and the potential imposition of US tariffs on refined metal, thereby tightening the global supply. Additionally, strong consumption, spurred by the worldwide shift towards renewable energy and artificial intelligence applications, continues to bolster the demand for copper.