• Copper pares gains after refreshing 13-day high as risk-aversion, concerns over top consumer China recall sellers.
  • Hawkish Fedspeak, cautious mood ahead of the key data/events weigh on market sentiment.
  • Extended lockdowns, geopolitical headlines raise concerns over China’s economic growth.

Copper prices on COMEX futures bear the burden of risk-aversion, as well as clouds over China demand, retreating from over a two-week high to $4.30 heading into Tuesday’s European session.

Elsewhere, the benchmark three-month copper on the London Metal Exchange (LME) was down 0.4% at $9,510.50 a tonne, as of 02:17 GMT per Reuters, after hitting its highest since May 5 at $9,565 on Monday. Further, the most-active June copper contract on the Shanghai Futures Exchange (SFE) rose 0.2% to 72,150 yuan ($10,827.48) a tonne, per the news.

The recently hawkish comments favoring the tighter monetary policy from San Francisco Federal Reserve Bank President Mary Daly and Kansas City Fed President Esther George seem to exert downside pressure on the market sentiment. Furthermore, anxiety ahead of the preliminary readings of the US S&P Global Manufacturing and Services PMIs for May, as well as a speech from Fed Chairman Jerome Powell, also weigh on the risk appetite.

On the same line was US Trade Representative (USTR) Katherine Tai who poured cold water on the face of expectations that the Sino-American jitters will be eased soon, at least for the trade concerns. The US diplomat said, “We're still working on next actions with China,” while turning down the optimism triggered by US President Joe Biden’s comments suggesting a reversal of the Trump-era tariffs on China.

It’s worth noting that Reuters highlights the covid-led lockdowns in China as the key barrier to copper’s latest weakness. “Beijing extended its work-from-home requirement to stem a COVID-19 outbreak, while Shanghai deployed more testing and curbs to hold on to its hard-won "zero COVID" status after two months of lockdown,” said the news.

Additionally challenging the outlook for China were the recently pessimistic growth forecasts from JP Morgan and Goldman Sachs.

While risk catalysts and concerns over China’s economic growth keep copper prices depressed, the dragon nation’s readiness to introduce more measures to overcome the pandemic-led economic hardships keeps the metal buyers hopeful. “China will broaden its tax credit rebates, postpone social security payments and loan repayments, roll out new investment projects and take other steps to support the economy, state television quoted the cabinet as saying on Monday,” said Reuters.

To sum up, copper prices should improve gradually but the latest risk-aversion may hinder the recovery moves.

Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.

If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.

FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.

The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.

Feed news Join Telegram

Recommended content


Recommended content

Editors’ Picks

EUR/USD trades in negative territory below 1.0400 after US data

EUR/USD trades in negative territory below 1.0400 after US data

Following a short-lasting recovery attempt in the early trading hours of the American session, EUR/USD returned below 1.0400. The data from the US showed on Thursday that the Core PCE inflation edged lower to 4.7% in May from 4.9% in April.

EUR/USD News

GBP/USD jumps above $1,820 as US yields push lower

GBP/USD jumps above $1,820 as US yields push lower

Gold erased its daily losses and climbed into positive territory above $1,820 on Thursday. After the data from the US showed that the Core PCE inflation declined to 4.7% on a yearly basis in May, the 10-year US T-bond yield fell sharply, fueling XAU/USD's rally.

GBP/USD News

Gold stays on the back foot, retreats toward $1,800

Gold stays on the back foot, retreats toward $1,800

Gold has lost its traction and declined toward $1,800 following a consolidation phase in the early European session. Although the benchmark 10-year US Treasury bond yield is down more than 1%, the broad-based dollar strength weighs on XAU/USD. 

Gold News

Crypto winter to resume in Q3

Crypto winter to resume in Q3

Bitcoin price, Ethereum and other cryptocurrencies are on the backfoot yet again – their moves accelerated after a panel discussion that was held at Siyntra for the ECB yearly economic forum.

Read more

FXStreet Premium users exceed expectations

FXStreet Premium users exceed expectations

Tap into our 20 years Forex trading experience and get ahead of the markets. Maximize our actionable content, be part of our community, and chat with our experts. Join FXStreet Premium today!

BECOME PREMIUM

Forex MAJORS

Cryptocurrencies

Signatures