The copper market experienced a remarkable surge on Friday, reaching an all-time high of $11,581.50 per ton in Shanghai. This impressive price jump was driven by a bullish forecast from Citigroup analysts, who anticipate an average price of $13,000 for the second quarter. Analysts attributed this upward trend to rising demand in the US and a decrease in global copper supply. Traders are closely monitoring trade risks as shipments move toward American ports ahead of potential tariffs, according to Jane Street.
Mercuria Energy Group Ltd., one of the largest copper traders, canceled approximately $500 million worth of metal from London Metal Exchange storage, marking the biggest stock cancellation in over ten years and aligning with the tightening market outlook projected by Citi. Notably, Max Layton, a prominent analyst at Citi, expressed strong conviction in copper’s upside potential through 2026, citing factors such as a generally favorable fundamental and macro backdrop.
Meanwhile, Macquarie Group analysts led by Peter Taylor anticipate further price increases for copper but cautioned that prices above $11,000 per ton may not be sustainable due to limited physical market tightness. They cited surging exchange inventories, reaching record highs since 2018 with a large proportion held in Comex warehouses in the US.
In contrast, gold, a traditional safe-haven asset, has been struggling, and its price has fallen. Traders are holding off on purchases until next week’s Federal Reserve meeting, where interest rate decisions will be announced. The World Gold Council predicts an expected rise of 15%-30% in gold prices by 2026, while a Reuters poll of experts suggests a median forecast of $3,400 per troy ounce for 2025 and a potential average of $4,275 by 2026.
Energy markets also saw modest gains, with Brent crude prices rising 0.3%, and West Texas Intermediate increasing by 0.4%. Traders reacted to recent attacks on Russian oil sites by Ukrainian forces, adding to concerns about supply at a time when peace talks remain stagnant.
The overall market is experiencing increased anticipation for the Fed’s decisions regarding interest rates. The CME FedWatch tool has revealed that traders are fully pricing in a 25-basis-point cut, bringing the federal funds rate down to 3.75% to 4%. A separate Reuters poll indicates that economists expect a similar 25-basis-point reduction at next week’s meeting. Meanwhile, CryptoPolitan expects lower interest rates to drive economic activity and boost oil demand.