• Gold price consolidates gains below $3,000 as the Fed week kicks in.
• US Dollar and Treasury yields stay defensive on trade war-led economic woes.
• Gold price eyes more upside as the daily technical setup stays bullish.

Gold price is trading better bid below the historic high of $3,005 reached last Friday. The upside potential in Gold price remains intact amid favorable fundamental and technical factors.

Gold price looks to US Retail Sales data ahead of Fed      

On the fundamental front, US President Donald Trump sparked global trade war and its impact on the US economic prospects, latest geopolitical tensions and the increased odds that the US Federal Reserve (Fed) will stick to its easing cycle continue to underpin the safe-haven appeal of the Gold price while remaining a drag on the US Dollar (USD).

Over the weekend, geopolitical tensions escalated between the US and Yemen after the US launched airstrikes on large-scale strikes on Yemen, targeting the Iran-backed militant group – Houthis. In response, Houthis attacked US vessels in the Red Sea, which Trump vowed to stop, warning that “hell will rain down” on the Houthis if they continue.

Meanwhile, Israeli military strikes killed at least 15 Palestinians in the Gaza Strip over the past 24 hours. Additionally, Trump’s envoy Steve Witkoff said on Sunday that he expected the US President to speak with Russian President Vladimir Putin this week after the Kremlin supported the 30-day cease-fire with Ukraine.

Gold price also find support from the latest measures launched by China on Sunday to boost consumption and raise incomes. China is the world’s top Gold consumer. Further, mostly upbeat Chinese activity data for the January and February period also helps keep Gold price afloat.

However, it remains to be seen if Gold price sees a fresh leg higher as the US Retail Sales data will likely provide fresh hints on the state of the US economy, driving the next direction in the USD.

That said, Gold traders will refrain from placing fresh bets on the bright metal ahead of Wednesday’s Fed policy announcements and the updated economic projections.

Gold price technical analysis: Daily chart

Gold price remains exposed to upside risks following the upside break of an ascending triangle formation last Thursday.

Gold buyers need acceptance above the $3,000 psychological barrier to extend the record rally toward the $3,050 mark.

The 14-day Relative Strength Index (RSI) sits just beneath the overbought region, which is currently near 67, keeping buyers hopeful.  

Therefore, any retracement in Gold price will likely be considered a good dip buying opportunity.

On a corrective downside, Gold price could challenge the previous triangle resistance-turned-support at $2,956, below which the 21-day Simple Moving Average (SMA) at $2,923 will be tested.

The last line of defense for buyers is at the triangle support line, pegged at $2,906.

• Gold price gains traction to around $2,985 in Monday’s early Asian session. 
• Economic uncertainty, Trump’s tariff war and geopolitical risks underpin the Gold price. 
• The US envoy said he expected Trump to speak with Putin this week. 

Gold price (XAU/USD) remains strong near $2,985 after retracing from an all-time high of $3,005 during the early Asian session on Monday. The softer US Dollar (USD) and economic uncertainty over the impact of a global trade war provide some support to the precious metal. Traders await the US February Retail Sales data, which is due later on Monday. 

The escalating trade war between the US and many of its major trading partners has rattled financial markets and prompted fears about the impact on economies across the world. On Thursday, US President Donald Trump threatened to impose a 200% tariff on wine, cognac and other alcohol imports from Europe. 

This measure came in response to the EU plan to impose tariffs on American whiskey and other products in April, which itself is a reaction to Trump’s 25% duties on steel and aluminum imports that took effect on Wednesday. 

Additionally, the softer Greenback after the weaker-than-expected US economic data contributes to the Gold’s upside. The preliminary reading of the University of Michigan (UoM) Consumer Sentiment Index showed that the index reached its lowest since November 2022, falling to 57.9 from 64.7 in the previous reading. This reading came in below the market consensus of 63.1.

The Houthis stated on Sunday that they launched an attack on the USS Harry S Truman aircraft carrier and its supporting vessels in the northern Red Sea, using 18 ballistic and cruise missiles as well as drones. “In a backdrop of geopolitical uncertainty and ongoing tariff changes, appetite for gold remains strong,” said Suki Cooper, a precious metals analyst at Standard Chartered.

However, any positive developments or easing fears of Russia and Ukraine conflicts might drag the Gold price lower. Last week, the United States and Ukraine decided to propose a 30-day ceasefire to Russia. Trump’s envoy Steve Witkoff said on Sunday that he expected Trump to speak with Russian President Vladimir Putin this week, saying that Putin “accepts the philosophy” of Trump’s ceasefire and peace terms.  

Goldman Sachs Group Inc has cut its oil price forecasts, citing weaker US growth due to tariffs and increased output from OPEC and its allies.

The bank now expects Brent crude to reach US$71 per barrel in December, down US$5 from its previous estimate, while US benchmark West Texas Intermediate (WTI) is projected at US$67. Analysts, including Daan Struyven, noted in a report dated Sunday that Brent will trade within a US$65 to US$80 range and average US$68 next year.

“The medium-term risks to our forecast remain to the downside given potential further tariff escalation and potentially longer OPEC+ production increases,” the analysts stated.

Goldman has also revised its forecast for oil demand growth this year, lowering it by 18% to 900,000 barrels per day due to a slowing US economy driven by higher tariffs. Additional supply from OPEC and its allies has also contributed to a more balanced market.

Brent crude was trading around US$71 on Monday, having declined roughly 14% from its peak in January.

Bloomberg

Related

Barclays sees Brent Crude prices at $74 per barrel this year, down by $9 from its previous forecast, as it slashed its global demand growth estimate in mounting economic uncertainties.

“We turn neutral on oil prices relative to the curve and consensus, as we revise down our 2025 demand outlook 510,000 barrels per day due to soft high?-?frequency indicators and elevated economic uncertainty,” Barclays analysts wrote in a note on Friday carried by Reuters.

The UK-based bank now sees this year’s demand growth at 900,000 bpd.

But Barclays is not turning bearish on future oil prices as inventories around the world are still at low levels and some producers could slow supply growth due to softer prices.

“However, we do not turn bearish relative to the curve, as inventories are low and still declining, and risks to the supply outlook are also skewed to the downside, due to price-sensitive producers pulling back and geopolitical tensions,” the bank’s analysts wrote.

Barclays expects U.S. crude oil production to increase by the end of this year by just 200,000 bpd compared to the end of the fourth quarter of 2024.

The International Energy Agency (IEA) said in its monthly report on Thursday that its current balances suggest global oil supply may exceed demand by around 600,000 bpd this year.

“If OPEC+ extends the unwinding of output cuts beyond April without reining in supply from members currently overproducing versus their targets, another 400 kb/d could be added to the market,” the IEA said.

The Paris-based agency expects growth in global oil demand to be just over 1 million bpd this year, reaching 103.9 million bpd.

OPEC, however, sees robust oil demand growth this year and next, expecting consumption to rise by 1.4 million bpd in each of 2025 and 2026.

Early on Friday, Brent Crude prices were trading just above the $70 per barrel mark, marginally higher on the day, propped up by a new round of U.S. sanctions targeting Iran’s oil industry.

By Charles Kennedy for Oilprice.com

More Top Reads From Oilprice.com

What drives the copper price rate? 

Copper prices are influenced by a variety of factors, but they can be broadly categorised into the following five key drivers:

1. Global economic activity

Copper is closely tied to economic growth, making it a reliable barometer for global health. Indicators such as GDP growth, industrial production, and manufacturing activity directly influence demand. Infrastructure projects, urbanisation, and the transition to renewable energy – like EVs and wind turbines – further fuel demand during periods of economic expansion.

2. Supply dynamics

Supply disruptions, such as labour strikes, declining ore grades, or natural disasters, can tighten the market and drive up prices. Major producers like Chile and Peru dominate global supply, meaning any instability in these regions significantly impacts copper availability and pricing.

3. Market sentiment and speculation

Investor behaviour plays a major role in copper price fluctuations. Optimism about future demand, driven by trends like the energy transition, can create bullish momentum, while negative sentiment tied to economic slowdowns can cause prices to drop. Speculative activity in futures markets often amplifies these trends.

4. Geopolitical and trade factors

Geopolitical events, trade policies, and currency fluctuations significantly influence copper prices. Tensions between major economies, tariffs, and export restrictions can disrupt global trade flows, while a stronger US dollar often makes copper more expensive for non-dollar economies.

5. Interest rates and inflation

Monetary policies, particularly interest rate decisions, indirectly impact copper demand. Low interest rates encourage borrowing and investment in infrastructure, boosting demand. Conversely, rising interest rates or inflation can curb economic activity and reduce the need for industrial metals.

Historical copper performance

When it comes to copper’s historical performance, the brown metal has been a valuable resource for millennia, with its use dating back to ancient civilisations for tools, weapons, and currency. While no formal markets existed in early history, copper’s utility ensured its consistent demand.

In modern history, copper prices began to fluctuate with industrialisation. By the 1930s, copper traded at around $0.10 per pound during the Great Depression, following a steep decline from earlier highs. The post-World War II era saw steady growth in demand due to electrification and industrial expansion, with prices averaging between $0.30 and $0.60 per pound through the mid-20th century.

This century

The 2000s marked a significant turning point. Copper prices surged from under $0.80 per pound in 2003 to nearly $4.00 by 2008, driven by China’s rapid industrialisation. However, the 2008 global financial crisis caused prices to plummet to around $1.40 per pound before rebounding quickly as infrastructure investment picked up. By 2011, copper reached over $4.50 per pound.

More recently, the energy transition and growing demand for electric vehicles (EVs) have sustained elevated copper prices. In May 2021, copper peaked at $4.80 per pound, fuelled by supply constraints and optimism around renewable energy projects. However, economic slowdowns in China, rising inflation, and monetary tightening have created price volatility. Over the past few years, copper prices have fluctuated between $3.50 and $4.50 per pound.

Today, copper remains a vital industrial asset, with its performance influenced by global economic activity, sustainability trends, and technological advancements. Its role in the green energy transition ensures its long-term significance, offering opportunities for traders to capitalise on price movements.

Copper trading strategies to consider

When approaching your copper trading strategy, it’s essential to recognise the opportunities and risks associated with this vital industrial metal. Copper’s role as an economic indicator and its importance in industries like construction, electronics, and renewable energy make it a dynamic asset to trade. Developing a robust trading strategy aligned with your goals, experience, and risk tolerance is critical for navigating its price volatility.

A well-planned trading strategy can help you open, manage, and close positions more effectively while minimising potential losses. Copper traders often combine technical analysis and fundamental insights to determine optimal entry and exit points.

1. Technical strategy

Technical strategies for copper rely on chart indicators to track price movements, identify patterns, and generate buy or sell signals. For instance:

These tools allow traders to interpret historical price data. Remember that past performance is not a reliable indicator of future results

2. Price action trading

Price action trading focuses on analysing copper’s historical price movements to anticipate future trends. For example:

Copper’s liquidity and volatility make this strategy a potential choice for short-term traders.

3. Trend trading

Trend trading involves taking long-term positions based on the direction of copper’s price trend. Traders may choose to:

• Go long during periods of rising prices, driven by factors such as increased demand for electric vehicles or renewable energy infrastructure.

• Short copper during economic slowdowns or increased supply from major producers like Chile and Peru.

Fundamental factors, such as China’s economic performance or changes in mining output, play a critical role in this strategy.

4. News trading

News trading capitalises on market-moving events that influence copper prices. Examples include:

• Geopolitical events: labour strikes in major copper-producing nations can tighten supply and push prices higher.

• Economic data: strong manufacturing data from China often signals rising copper demand, leading to price increases.

• Weather disruptions: natural disasters affecting mines can lead to supply constraints.

Staying updated on news and analysis is crucial for implementing this strategy effectively.

5. Range trading

Range trading identifies support and resistance levels within which copper prices fluctuate. For instance, if copper is trading in a range of $3.50-$4.50:

• Support level: prices near $3.50 per pound (an undervalued zone).

• Resistance level: prices nearing $4.50 per pound (an overbought zone).

• Using tools like Bollinger Bands, traders buy at support and sell at resistance, leveraging copper’s historical price behaviour.

6. Breakout trading

Breakout trading targets opportunities when copper prices move outside of established ranges, signaling potential volatility. For example:

Breakouts often occur due to significant market catalysts, such as policy changes in China or major supply disruptions.

7. Fundamental trading

Fundamental trading in copper focuses on analysing supply-demand dynamics rather than relying solely on technical indicators. You can consider:

• Going long on copper during periods of strong economic growth or increased infrastructure investment.

• Shorting copper when global demand slows or mining output increases significantly.

This strategy requires a deep understanding of macroeconomic trends, particularly those tied to industrial production and the energy transition.

Additional trading insights

• Diversify your strategies: instead of relying on a single approach, consider a mix of strategies based on market conditions. For instance, position trading might work well in a bullish market, while trend trading can be effective in volatile conditions.

• Risk management is key: set clear stop-loss levels and position sizing rules to protect your capital. Even the most effective strategies can lead to losses without proper risk controls.

• Stay educated: regularly update your knowledge of market trends, economic indicators, and sector performance. Enrolling in commodity trading courses or following expert analysts can deepen your expertise.

Disclaimer: All figures included in the above examples are for illustrative purposes only and do not reflect actual market data or real account conditions.

FAQ

What drives the copper price rate? 

Copper prices are influenced by a variety of factors, but they can be broadly categorised into the following five key drivers:

1. Global economic activity

Copper is closely tied to economic growth, making it a reliable barometer for global health. Indicators such as GDP growth, industrial production, and manufacturing activity directly influence demand. Infrastructure projects, urbanisation, and the transition to renewable energy – like EVs and wind turbines – further fuel demand during periods of economic expansion.

2. Supply dynamics

Supply disruptions, such as labour strikes, declining ore grades, or natural disasters, can tighten the market and drive up prices. Major producers like Chile and Peru dominate global supply, meaning any instability in these regions significantly impacts copper availability and pricing.

3. Market sentiment and speculation

Investor behaviour plays a major role in copper price fluctuations. Optimism about future demand, driven by trends like the energy transition, can create bullish momentum, while negative sentiment tied to economic slowdowns can cause prices to drop. Speculative activity in futures markets often amplifies these trends.

4. Geopolitical and trade factors

Geopolitical events, trade policies, and currency fluctuations significantly influence copper prices. Tensions between major economies, tariffs, and export restrictions can disrupt global trade flows, while a stronger US dollar often makes copper more expensive for non-dollar economies.

5. Interest rates and inflation

Monetary policies, particularly interest rate decisions, indirectly impact copper demand. Low interest rates encourage borrowing and investment in infrastructure, boosting demand. Conversely, rising interest rates or inflation can curb economic activity and reduce the need for industrial metals.

Historical copper performance

When it comes to copper’s historical performance, the brown metal has been a valuable resource for millennia, with its use dating back to ancient civilisations for tools, weapons, and currency. While no formal markets existed in early history, copper’s utility ensured its consistent demand.

In modern history, copper prices began to fluctuate with industrialisation. By the 1930s, copper traded at around $0.10 per pound during the Great Depression, following a steep decline from earlier highs. The post-World War II era saw steady growth in demand due to electrification and industrial expansion, with prices averaging between $0.30 and $0.60 per pound through the mid-20th century.

This century

The 2000s marked a significant turning point. Copper prices surged from under $0.80 per pound in 2003 to nearly $4.00 by 2008, driven by China’s rapid industrialisation. However, the 2008 global financial crisis caused prices to plummet to around $1.40 per pound before rebounding quickly as infrastructure investment picked up. By 2011, copper reached over $4.50 per pound.

More recently, the energy transition and growing demand for electric vehicles (EVs) have sustained elevated copper prices. In May 2021, copper peaked at $4.80 per pound, fuelled by supply constraints and optimism around renewable energy projects. However, economic slowdowns in China, rising inflation, and monetary tightening have created price volatility. Over the past few years, copper prices have fluctuated between $3.50 and $4.50 per pound.

Today, copper remains a vital industrial asset, with its performance influenced by global economic activity, sustainability trends, and technological advancements. Its role in the green energy transition ensures its long-term significance, offering opportunities for traders to capitalise on price movements.

Copper trading strategies to consider

When approaching your copper trading strategy, it’s essential to recognise the opportunities and risks associated with this vital industrial metal. Copper’s role as an economic indicator and its importance in industries like construction, electronics, and renewable energy make it a dynamic asset to trade. Developing a robust trading strategy aligned with your goals, experience, and risk tolerance is critical for navigating its price volatility.

A well-planned trading strategy can help you open, manage, and close positions more effectively while minimising potential losses. Copper traders often combine technical analysis and fundamental insights to determine optimal entry and exit points.

1. Technical strategy

Technical strategies for copper rely on chart indicators to track price movements, identify patterns, and generate buy or sell signals. For instance:

These tools allow traders to interpret historical price data. Remember that past performance is not a reliable indicator of future results

2. Price action trading

Price action trading focuses on analysing copper’s historical price movements to anticipate future trends. For example:

Copper’s liquidity and volatility make this strategy a potential choice for short-term traders.

3. Trend trading

Trend trading involves taking long-term positions based on the direction of copper’s price trend. Traders may choose to:

• Go long during periods of rising prices, driven by factors such as increased demand for electric vehicles or renewable energy infrastructure.

• Short copper during economic slowdowns or increased supply from major producers like Chile and Peru.

Fundamental factors, such as China’s economic performance or changes in mining output, play a critical role in this strategy.

4. News trading

News trading capitalises on market-moving events that influence copper prices. Examples include:

• Geopolitical events: labour strikes in major copper-producing nations can tighten supply and push prices higher.

• Economic data: strong manufacturing data from China often signals rising copper demand, leading to price increases.

• Weather disruptions: natural disasters affecting mines can lead to supply constraints.

Staying updated on news and analysis is crucial for implementing this strategy effectively.

5. Range trading

Range trading identifies support and resistance levels within which copper prices fluctuate. For instance, if copper is trading in a range of $3.50-$4.50:

• Support level: prices near $3.50 per pound (an undervalued zone).

• Resistance level: prices nearing $4.50 per pound (an overbought zone).

• Using tools like Bollinger Bands, traders buy at support and sell at resistance, leveraging copper’s historical price behaviour.

6. Breakout trading

Breakout trading targets opportunities when copper prices move outside of established ranges, signaling potential volatility. For example:

Breakouts often occur due to significant market catalysts, such as policy changes in China or major supply disruptions.

7. Fundamental trading

Fundamental trading in copper focuses on analysing supply-demand dynamics rather than relying solely on technical indicators. You can consider:

• Going long on copper during periods of strong economic growth or increased infrastructure investment.

• Shorting copper when global demand slows or mining output increases significantly.

This strategy requires a deep understanding of macroeconomic trends, particularly those tied to industrial production and the energy transition.

Additional trading insights

• Diversify your strategies: instead of relying on a single approach, consider a mix of strategies based on market conditions. For instance, position trading might work well in a bullish market, while trend trading can be effective in volatile conditions.

• Risk management is key: set clear stop-loss levels and position sizing rules to protect your capital. Even the most effective strategies can lead to losses without proper risk controls.

• Stay educated: regularly update your knowledge of market trends, economic indicators, and sector performance. Enrolling in commodity trading courses or following expert analysts can deepen your expertise.

Disclaimer: All figures included in the above examples are for illustrative purposes only and do not reflect actual market data or real account conditions.

FAQ

FX:EURUSD market reached the November high area and is currently testing last week’s high as well. On the weekly timeframe, the price has formed a large bullish candle, indicating an impulse leg. Typically, after such a move, prices tend to make a sharp drop. Given the presence of both the weekly and November highs above, I think the market may struggle to move…

Brent oil price faced strong negative pressures in the previous sessions to break 70.75$ and settle below it, noticing that the price attempts to rise again, approaching the mentioned level, while stochastic loses its positive momentum clearly to enter the overbought areas.

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