• Gold price hovers around $2,650 early Tuesday, consolidating the previous decline.    
• Despite lingering Chinese economic risks, the US Dollar pulls back with Treasury bond yields.
• Gold price could find fresh demand as long as a 21-day SMA holds at $2,635. The daily RSI stays bullish.

Gold price is trading modestly flat near $2,650 early Tuesday, licking its wounds after retreating from a six-day high of $2,667 set on Monday.  

Gold price buyers test their luck

The tepid recovery attempt in Gold price is sponsored by a mild correction in the US Dollar (USD) against its major rivals from over two-month highs. Meanwhile, retreating US Treasury bond yields on renewed haven flows into the government bonds exert downward pressure on the USD, allowing Gold price buyers to briefly come up for air.

Amid a quiet Asian affair, China’s economic worries persist and dent risk sentiment. The latest data showed that Chinese exports grew at the slowest pace in five months in September. Further, a lack of specifics on China’s fiscal stimulus announced last Saturday remains a drag on investors’ confidence.

However, it remains to be seen if Gold price builds on the rebound, as markets continue to bet on a smaller – 25 basis points (bps) interest rate cut by the US Federal Reserve (Fed) in November, with a probability of such a move seen at about 86%, according to the CME Group’s FedWatch Tool.

The Greenback extended its previous week’s advance and hit its highest in over two months across its competitors after Fed Governor Christopher Waller said Monday urged “more caution” on rate cuts ahead, citing recent economic data. “Whatever happens in the near term, my baseline still calls for reducing the policy rate gradually over the next year,” Waller added.

Joining the chorus, Minneapolis Fed President Neel Kashkari said on Monday that the monetary policy is still in a restrictive stance, adding further “modest” rate cuts could be appropriate, per Reuters.

Also, Gold price could face headwinds from easing geopolitical tensions between Israel and Iran after the Washington Post (WaPo) cited two officials familiar with the matter, as saying that Israeli Prime Minister Benjamin Netanyahu told the US that Israel would strike Iranian military, not nuclear or oil, targets. The report suggests that there will be a more limited counterstrike aimed at preventing a full-scale war.

Attention now turns toward speeches from more Fed policymakers for fresh trading impetus in the US Dollar and the Gold price, as full markets return later in the American session on Tuesday. Gold traders could also resort to position adjustments ahead of Thursday’s US Retail Sales data release.

Gold price technical analysis: Daily chart

Gold price stays supported above the key 21-day Simple Moving Average (SMA) support, now at $2,635, so far this week.

The 14-day Relative Strength Index (RSI), however, holds firm above the midline, suggesting that any dip in Gold price could be a good buying opportunity in the near term.

If the Gold price recovers, the next bullish target is seen at the previous high of $2,667, followed by the intermittent high at $2,670.

Further up, the record high at $2,686 will come into play.

Conversely, the immediate support is seen at the 21-day SMA at $2,632, below which the three-week lows near the $2,600 threshold will be tested.

A sustained break below the latter could extend the downside toward the September 20 low of $2,585.

XAU/USD Current price: $2,650.45

• The US Dollar maintained its positive traction at the beginning of the week.
• Investors await for Canada and UK inflation updates and the ECB monetary policy decision.
• XAU/USD holds near record highs, but bulls are giving signs of giving up.

Spot Gold is under mild pressure on Monday, trading with modest losses after peaking at $2,666.71 earlier in the day.  XAU/USD is stable at around $2,650 a troy ounce, as the positive tone of Wall Street limits the US Dollar (USD) demand. The Greenback, however, started the week with a firm footing amid persistent geopolitical tensions in the Middle East and news coming from China.

The Chinese Finance Minister Lan Fo’an offered a press conference over the weekend, but failed to provide details on additional support to the battered economy, leaving investors with a sour taste in their mouths. Additionally, Chinese data missed expectations, creating doubts about the economic future of the Asian giant.

Other than that, European equities posted modest gains as investors await clearer clues. This week, Canada and the United Kingdom (UK) will publish inflation updates, while the European Central Bank (ECB) will announce its decision on monetary policy next Thursday. In the meantime, Federal Reserve’s (Fed) officials will be on the wires and may or may not provide fresh clues on what the central bank may do next.

XAU/USD short-term technical outlook  

From a technical point of view, the daily chart for XAU/USD shows bulls may be a bit exhausted. The pair stands near its recent highs, but the Momentum indicator heads south and is currently crossing its midline into negative territory. The Relative Strength Index (RSI) indicator also turned lower but holds near overbought territory. At the same, the pair is developing above all its moving averages, which maintain moderated bullish slopes. Overall, the risk of a downward extension seems limited, yet bulls seem to have moved to the sidelines.

In the near term, and according to the 4-hour chart, the technical picture is quite similar. XAU/USD is finding intraday buyers around a flat 100 Simple Moving Average (SMA) while a mildly bullish 20 SMA advances below the longer one. Technical indicators, on the contrary, turned lower within positive levels, showing uneven bearish strength. The risk of a bearish continuation should increase on a break below the $2,636.00 region, the immediate support area.

 Support levels: 2,363.00 2,325.40 2,603.90

Resistance levels: 2,661.20 2,673.10 2,685.45

Lower Price Levels

There are several lower price levels to keep an eye on where support may eventually be seen. The maximum for the bulls would be a test of support around the 200-Day MA, currently at 2.25. The 200-Day line was recaptured in early-September leading to an accelerated advance that culminated with the recent swing high of 3.02. This would be the first pullback towards the 200-Day line following the recent advance. Therefore, the 200-Day line has a good chance of marking the maximum low-price zone for the current retracement.

Breakdown Points to Lower Prices

Today’s decline took natural gas below the 38.2% Fibonacci retracement at 2.58, which was near last week’s low. It most likely leads to a test of support around the 50% retracement at 2.45, at a minimum. That price level should be considered along with a prior interim trend high at 2.44. Further down from there is the 50-Day MA, now at 2.37. Moreover, consider the 50-Day line to begin a potential support zone down to the 200-Day MA. However, in between those two moving averages is the 61.8% Fibonacci retracement at 2.31. The 2.31 price zone is also indicated as a potential support area by the mid-August swing high at 2.30.

Bigger Picture – Consolidation

In the bigger picture, natural gas remains within a large symmetrical triangle pattern that defines a consolidation range. A failed bullish breakout attempt occurred in the most recent rally that ended at the recent high of 3.02. However, since a consolidation triangle exists, there is always the possibility of an eventual test of support at the lower boundary line of the pattern.

For a look at all of today’s economic events, check out our economic calendar.

In its latest short term energy outlook (STEO), which was released this week, the U.S. Energy Information Administration (EIA) revealed its latest Brent oil price forecast for 2024 and 2025.

According to its October STEO, the EIA now sees the Brent spot price averaging $80.89 per barrel this year and $77.59 per barrel next year. In its previous STEO, which was released in September, the EIA projected that the Brent spot price would average $82.80 per barrel in 2024 and $84.09 per barrel in 2025.

A quarterly breakdown included in the October STEO revealed that the EIA sees the Brent spot price average coming in at $75.97 per barrel in the fourth quarter of this year, $78 per barrel in the first quarter of 2025, $79 per barrel in the second quarter, $77.67 per barrel in the third quarter, and $75.72 per barrel in the fourth quarter.

In the EIA’s September STEO, the organization forecast that the Brent spot price would average $81.64 per barrel in the fourth quarter of 2024, $83.34 per barrel in the first quarter of 2025, $85 per barrel across the second and third quarters of next year, and $83 per barrel in the fourth quarter.

The EIA’s latest STEO put the 2023 Brent spot price average at $82.41 per barrel.

“The Brent crude oil spot price averaged $74 per barrel in September, down $6 per barrel from August,” the EIA noted in its October STEO.

“Prices fell in September as concerns over global oil demand growth outweighed declines in oil inventories and OPEC+ members’ decision to delay production increases until December 2024,” it added.

“However, after recent military actions involving Israel, Lebanon, and Iran, the Brent spot price rose to $79 per barrel on October 4, up 11 percent from a week earlier,” it continued.

“The potential for further escalation – such as an Israeli response to Iran’s missile attack on October 1 – have injected significant uncertainty and volatility into oil markets in recent days,” it went on to state.

“Following the September drop in prices and our expectation that oil demand growth will be lower next year than we had previously forecast, we have lowered our forecast for crude oil prices despite increasing oil prices in early October,” it noted.

In its latest STEO, the EIA highlighted that no oil supplies have been affected by increased military action in the Middle East and noted that it does not assume any disruption in its forecast.

“However, the conflict has escalated in recent weeks with no timeline for a potential resolution, increasing the possibility for supply disruptions and price volatility,” the EIA warned.

“At the same time, we assess that significant surplus crude oil production capacity is available, which could be brought online in the event of a disruption,” it added.

In its October STEO, the EIA said OPEC+ production cuts continue to mean less oil is being produced globally than is being consumed and pointed out that oil is being withdrawn from inventories.

In the STEO, the EIA estimated that global oil inventories fell by 0.8 million barrels per day in the third quarter of 2024 and revealed that it expects inventories will fall by 0.6 million barrels per day through 1Q25.

“As a result, we expect Brent prices will rise from $74 per barrel in September to average $79 per barrel in 1H25, which is about $6 per barrel lower than in last month’s STEO,” the EIA said.

“By the middle of next year, we anticipate accelerated growth in oil production as OPEC+ increases its production and as production continues to grow in the United States, Guyana, Brazil, and Canada,” it added.

“We forecast oil inventories will increase by an average of almost 0.6 million barrels per day in 2H25 as production growth globally begins to outweigh global oil demand growth,” it continued.

The EIA also warned in its October STEO that, in addition to the escalating Middle East conflict, other sources of uncertainty remain.

“We now expect production in Libya will begin increasing in the coming weeks, following recent production outages,” it said.

“But production in Libya can be volatile and returning crude oil production volumes might fall short of our expectations,” it added.

“We also assess that OPEC+ producers are likely to continue to limit production below recently announced targets in 2025. However, if OPEC+ producers stick closely to announced production levels in 2H25, it would be a downside risk to oil prices,” it went on to state.

A research note sent to Rigzone by the JPM Commodities Research team last Friday showed that J.P. Morgan expects the Brent crude oil price to average $82 per barrel this year and $75 per barrel next year.

A quarterly breakdown in that note showed that J.P. Morgan sees the commodity averaging $80 per barrel in the fourth quarter of 2024, $82 per barrel in the first quarter of 2025, $77 per barrel in the second quarter, $73 per barrel in the third quarter, and $69 per barrel in the fourth quarter.

In a report sent to Rigzone by Standard Chartered Commodities Research Head Paul Horsnell on Tuesday, Standard Chartered projected that the ICE Brent nearby future crude oil price will average $87 per barrel in the fourth quarter of 2024, $89 per barrel in the first quarter of next year, $92 per barrel in the second quarter, $95 per barrel in the third quarter, and $93 per barrel in the fourth quarter.

“A short-covering rally has taken oil prices sharply higher over the past week,” Standard Chartered analysts, including Horsnell, stated in the report.

“Brent for December delivery settled at $80.93 per barrel on 7 October, a week on week increase of $9.23 per barrel (12.9 percent) making it the strongest over the week among the major commodity contracts,” they added.

“In our view, the entire move down from $80 per barrel to $70 per barrel was an unsustainable undershooting which carried little fundamental information. We see the unwinding of that move in similar terms; while attacks on Beirut provided some initial momentum higher, the rest of the increase was simply the start of a move towards less extreme speculative positioning,” they continued.

In the report, the Standard Chartered analysts noted that, once the unwinding of the undershoot in prices is accounted for, the market response to events in the Middle East, and particularly the threats made against Iranian energy infrastructure, appears extremely limited.

“Brent’s front-month settlement on 7 October was lower than the settlement for the equivalent days in 2021, 2022 and 2023 and prompt prices have simply returned to where they were as recently as late August,” they said.

“Despite the increase in prices, we detect little sign of any change to the overwhelmingly bearish sentiment that has dominated the oil market over the past three months,” they added.

“Many traders are seemingly still prepared to short oil aggressively if the daily news flow and market momentum allows,” they warned.

To contact the author, email andreas.exarheas@rigzone.com

• Silver prices decline as a risk-on mood and weak Chinese economic data weigh on the precious metal.
• Momentum favors buyers, but caution is warranted with the RSI showing signs of weakening.
• Key resistance lies at $31.63, with bulls aiming for $32.00 and the year-to-date high of $32.95. A break below $31.00 could target support at $30.76 and $30.12.

Silver’s price dropped during the North American session on Monday, courtesy of a broad risk-on mood. China’s economy remains weak despite government efforts to stimulate consumer spending. Therefore, the XAG/USD trades at $31.25, down by over 0.88%.

XAG/USD Price Forecast: Technical outlook

After edging higher for two consecutive days, the XAG/USD has retreated somewhat, yet it remains above the $31.00 figure.

Momentum favors buyers in the near term, as shown by the Relative Strength Index (RSI), though caution is warranted, as RSI peaked below the latest two troughs.

For XAG/USD to resume its uptrend, bulls must clear the October 11 high at $31.63. If surpassed, the next stop would be the $32.00 figure, followed by the May 29 high at $32.29 and the May 20 at $32.50. Up next would be the year-to-date (YTD) high at $32.95.

Conversely, if sellers move in, the first support would be the $31.00 mark, followed by today’s low of $30.76. Once surpassed, the next stop would be the October 8 low of $30.12, followed by the confluence of the 50-100-day moving averages (DMAs) at $29.75/74.

XAG/USD Price Action – Daily Chart

• Silver price receives support from safe-haven flows amid rising geopolitical tensions.
• China’s PLA initiated drills in the Taiwan Strait and around Taiwan on Monday.
• The non-yielding Silver gains support from growing expectations of the Fed slowing the pace of interest rate cuts.

Silver price (XAG/USD) extends its winning streak for the third consecutive day, trading around $31.30 per troy ounce during the Asian session on Monday. Silver price receives support from the safe-haven flows amid rising geopolitical tensions.

On Sunday, Hezbollah claimed responsibility for the drone attack in north-central Israel, killing at least four Israeli soldiers and over 60 people were injured, according to CNN. The number of injuries makes the attack one of the bloodiest on Israel since the war started last October.

China’s military initiated drills in the Taiwan Strait and around Taiwan on Monday. A spokesperson for the US Department of State expressed serious concern regarding the People’s Liberation Army’s (PLA) military actions. In response, Taiwan’s Defense Ministry stated, “We will not escalate conflict in our response.”

Non-yielding assets like Silver may have received support from rising expectations that the Federal Reserve (Fed) will slow the pace of interest rate cuts more than previously anticipated. Last week, data showed that US producer prices remained steady in September, alongside a surge in jobless claims, which challenged the perception of the US labor market’s resilience to restrictive interest rates.

According to the CME FedWatch Tool, markets are pricing in almost 87% chance of a 25 basis point rate cut in November, with no expectation of a 50 basis point reduction. Lower interest rates make Silver more attractive to investors seeking higher returns, as the opportunity cost of holding non-yielding assets decreases.

• Gold price loses momentum to around $2,650 in Monday’s early Asian session. 
• Weaker Chinese economic data undermine the Gold price. 
• The US PPI report and Middle East geopolitical risks could support the yellow metal. 

Gold price (XAU/USD) edges lower to $2,650, snapping the two-day winning streak during the early Asian session on Monday. The downbeat Chinese economic data and firmer Greenback weigh on the precious metal. Nonetheless, the prospects of further interest rate cuts this year and safe-haven demand might cap its downside. 

China’s deflation pressure increased in September. The Consumer Price Index (CPI) inflation unexpectedly eased in September, while the Producer Price Index (PPI) fell more than expected during the same period, highlighting the need for more stimulus measures. The persistent deflationary pressure in China is likely to exert some selling pressure on the yellow metal, as China is the world’s largest Gold consumer. 

The US Producer Price Index (PPI) was unchanged in September, indicating a still-favorable inflation outlook and supporting the bets of the Federal Reserve (Fed) rate cut in November. “The PPI numbers leaned friendly for the precious metals market bulls and suggest the Fed remains on track for two quarter-point interest rate cuts this year,” said Jim Wyckoff, senior market analyst at Kitco Metals.

Additionally, the rising geopolitical tensions in the Middle East have triggered the fear of wider war in the region, boosting the traditional safe-haven assets like the Gold price. On Sunday, at least four Israeli soldiers were killed and more than 60 people were injured by a drone attack in north-central Israel, per CNN. The number of injuries makes the attack one of the bloodiest on Israel since the war started last October. Hezbollah has claimed responsibility for the attack.

• Gold edged lower this week but managed to stabilize above $2,600.
• The technical outlook suggests that sellers remain reluctant to bet on a deeper correction.
• Investors will keep a close eye on macroeconomic data releases from China next week.

Gold (XAU/USD) declined sharply in the first half of the week but regained its traction after coming within a touching distance of $2,600. Investors will scrutinize macroeconomic data releases from China next week, while keeping a close eye on geopolitical developments.

Gold stages limited correction

Gold edged lower at the beginning of the week and closed in the red on Monday as the positive impact of the previous Friday’s upbeat September employment data continued to be felt on the USD. Meanwhile, although geopolitical tensions remain high, they haven’t escalated any further with Israel taking its time in mulling its retaliatory response to Iran. In turn, the broad-based USD strength caused XAU/USD to stay on the back foot.

The National Development & Reform Commission (NDRC), China’s state planner, said on Tuesday that the downward pressure on China’s economy is increasing, adding “China’s economy is facing more complex internal, external environments.” 

Growing concerns over an economic downturn in China, the world’s biggest consumer of Gold, caused the precious metal to continue to stretch lower. Reflecting this sentiment, China’s Shanghai Composite Index fell nearly 7%, and Hong Kong’s Hang Seng Index lost over 1% on Wednesday.

The hawkish tone in the minutes of the Federal Reserve’s (Fed) September policy meeting helped the US Dollar (USD) outperform its rivals late Wednesday, not allowing XAU/USD to stage a rebound. The publication showed that even though a substantial majority of Fed officials supported the 50-basis-point (bps) rate cut, there was even a broader consensus that this initial step would not lock the Fed into any specific pace for future rate cuts. Additionally, some participants favored only a 25 bps reduction in the policy rate cut, while “a few others” mentioned they could have supported that decision as well.

The US Bureau of Labor Statistics reported on Thursday that annual inflation in the US, as measured by the change in the Consumer Price Index (CPI), softened to 2.4% in September from 2.5% in August. The core CPI, which excludes volatile food and energy prices, rose 3.3% on a yearly basis, surpassing the market expectation of 3.2%. Finally, the CPI and the core CPI increased 0.2% and 0.3%, respectively, on a monthly basis. Other data from the US showed that the number of first-time applications for unemployment benefits climbed to 258,000 in the week ending October 5 from 225,000 in the previous week. The disappointing Initial Jobless Claims reading didn’t allow the USD to benefit from the inflation report and helped XAU/USD find its footing.

In the absence of fundamental drivers, Gold continued to stretch higher on Friday but struggled to gather bullish momentum. The final data of the week from the US showed that the Producer Price Index (PPI) rose 1.8% on a yearly basis in September, arriving above the market forecast of 1.6%.

Gold investors await key data releases from China

The US economic calendar will not feature any high-tier data releases in the first half of the week. On Thursday, the US Census Bureau will release Retail Sales data for September. The market reaction to this data could be straightforward, with a positive surprise supporting the USD and a negative reading having the opposite impact on the currency’s valuation. Nevertheless, this data by itself is unlikely to have a strong enough effect to alter Gold’s direction.

Meanwhile, market participants will pay close attention to macroeconomic data releases from China. In the Asian session on Monday, Trade Balance figures could set Gold’s tone at the beginning of the week. A sharp decline in the trade surplus could feed into concerns over China’s economic health and weigh on Gold. Early Friday, the third-quarter Gross Domestic Product (GDP), which is forecast to show an annualized growth of 4.6%, alongside the Industrial Production and Retail Sales data for September, will be scrutinized by investors. On a yearly basis, Industrial Production and Retail Sales are anticipated to rise by 4.6% and 2.4%, respectively. Again, disappointing data releases are likely to hurt Gold, while positive surprises could be supportive for the yellow metal.  

Investors will continue to assess geopolitical developments next week as well. If Israel carries on with a retaliatory attack against Iran, a deepening crisis in the Middle East could help Gold benefit from safe-haven demand.

Gold technical outlook

The Relative Strength Index (RSI) indicator on the daily chart rose toward 60 after falling to the neutral 50 area earlier in the week, suggesting that Gold’s bullish bias remains intact following a technical correction. 

On the upside, the midpoint of the ascending regression channel coming from June aligns as immediate resistance at $2,660 before $2,675 (static level) and $2,700-$2,710 (round level, upper limit of the ascending channel).

In case XAU/USD drops below $2,600-$2,590 (lower limit of the ascending channel, Fibonacci 23.6% retracement of the June-September uptrend) and starts using this level as resistance, technical sellers could take action. In this scenario, $2,545-$2,535 (50-day Simple Moving Average, Fibonacci 38.2% retracement) could be seen as the next bearish target.

• Silver price rises to near $31.50 after the release of the US PPI data for September.
• The annual headline and core PPI grew faster than expected.
• The Fed is expected to cut interest rates again in November.

Silver price (XAG/USD) climbs to near $31.50 in Friday’s New York session. The white metal gains while the US Dollar (USD) remains steady after the release of the United States (US) Producer Price Index (PPI) data for September.

The US Dollar Index (DXY), which tracks the Greenback’s value against six major currencies, wobbles around 103.00.

The PPI report showed that the annual headline producer inflation grew by 1.8%, faster than estimates of 1.6%. However, it remained slower than 1.9% in August, upwardly revised from 1.7%. The annual core PPI – which excludes volatile food and energy prices – accelerated at a faster-than-expected pace to 2.8% from expectations of 2.7% and the former release of 2.6%, upwardly revised from 2.4%.

Meanwhile, the month-on-month headline producer inflation remained flat, strengthening the case for further interest rate cuts by the Federal Reserve (Fed). According to the CME FedWatch tool, 30-day Federal Fund Futures pricing data shows that the central bank will cut its borrowing rates by 25 basis points (bps) to 4.50%-4.75% in November.

The Fed started the policy-easing cycle with a 50-bps interest rate cut in September as Fed officials were concerned over growing job market risks, with confidence that price pressures will sustainably return to the bank’s target of 2%.

Silver technical analysis

Silver price strengthens after breaking above the horizontal resistance plotted from the September 30 low of $31.30, which is expected to act as support ahead. The near-term outlook of the Silver price has become upbeat as it has climbed above the 20-period Exponential Moving Average (EMA), which trades around $31.50. The asset is expected to extend its upside toward an October high of around $33.00.

The 14-period Relative Strength Index (RSI) climbs to near 60.00. A bullish momentum would trigger if the RSI breaks above 60.00.

Silver four-hour chart

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Copper is one of the most versatile and essential metals in today’s world. With applications ranging from electrical wiring to renewable energy infrastructure, its demand remains robust. But what does the future hold for copper prices?

We will draw on insights from our in-house experts (Boris Mikanikrezai and Andrew Cole) when exploring the current global picture. We will provide a copper price forecast for 2024 and a long-term outlook for 2025.

Global copper market outlook

As we navigate through 2024, the copper market presents a complex global picture, influenced by varying economic climates in major regions such as the US, China and Europe.

In the United States, the price of copper remains stable yet subdued, largely due to the seasonal summer lull, with premiums holding steady in the Midwest. Despite challenges, long-term optimism prevails, buoyed by potential supply imbalances and increasing demand for copper in green energy projects.

China, a major player in the copper market, witnessed a mild recovery in its physical market during August 2024. The copper grade A cathode premium in Shanghai saw an uptick, reflecting improved market conditions. This recovery is driven by expectations for better import arbitrage conditions post-LME price decline, although challenges remain due to fluctuating prices.

In Europe, the copper market remains weak, particularly in Germany – Europe’s largest consumer. Despite some demand from green energy projects, overall market conditions are bearish, with ample stock levels and sluggish performance in the manufacturing, automotive and construction sectors.

For more information on our long-term price analysis of the global copper market, see Fastmarkets’ copper 10-year long-term forecast.

Short-term copper price forecast for the remainder of 2024

In Q4 2024, copper prices are expected to experience upward pressure, driven by a more favorable macroeconomic sentiment (Federal Reserve rate cuts, stimulus in China), tighter market fundamentals (on expectations for smelter production cuts, a recovery in physical demand in China), positive seasonality (the fourth quarter typically being the strongest) and speculative positioning (rapid rebuilding of long positions). Given these factors, Fastmarkets analysts view the risk-reward profile skewed to the upside for the fourth quarter.

In China, the Shanghai premium should continue its recovery in the final quarter of the year, largely due to the improved sentiment following the substantial stimulus measures implemented by the country’s authorities.

In the US, spot market activity is projected to remain stable until the year-end, although supply availability could become a little tighter. Meanwhile, Europe might also see quiet spot activity until the remainder of the year, as most consumers are adequately covered by long-term contracts.

Improved macroeconomic conditions

China’s stimulus package, announced in September, represents a significant injection of liquidity totaling 3.95 trillion yuan ($560 billion), equivalent to over 3% of China’s GDP. The size of this package is substantial, nearing the level of support provided during the Covid-19 crisis. Alongside the Federal Reserve’s recent rate cuts, this should increase liquidity in the financial system in the coming months. Speculators have already begun to re-engage on the long side of the copper market in response. Given that the fourth quarter is historically the strongest for copper, we expect prices to average around $10,265 per tonne in Q4 2024, which would mark a record high.

Short-term challenges

Lower trading volumes and potential market volatility suggest caution. Despite the expected rise, the market remains sensitive to macroeconomic conditions and geopolitical events. Investors should keep an eye on these factors as they could impact short-term price movements.

The video below shows the relationship between global refined copper supply and demand, from 2022 through 2025.

Long-term copper price forecast for 2025 and beyond

Beyond the immediate future, the copper market and the price of copper is poised for a bullish long-term trajectory, driven by the energy transition’s escalating demand. For instance, by 2025 the copper grade A cathode premium in Rotterdam is projected to rise by approximately 25%, reflecting tighter regional fundamentals and a recovering European market.

Fastmarkets’ copper long-term outlook remains optimistic. As we move toward 2034, refined copper consumption is set to be driven significantly by sectors linked to the energy transition, including electric vehicles and renewable energy applications. The anticipated structural supply deficit will likely necessitate increased investments in production facilities, further underpinning a bullish outlook for copper prices.

Key drivers of copper demand and projected growth rates

As mentioned, refined copper consumption will be supported by demand from sectors linked to the energy transition. Some of its uses are listed below:

∙ To help connect batteries to electric vehicle (EV) powertrains
∙ For use in electric motors in the EV charging infrastructure
∙ Solar energy and wind power applications
∙ Grid connections

We expect total apparent demand for copper to rise at a compound annual growth rate (CAGR) of 2.6% in the decade to 2034. Copper consumption from energy transition sectors should grow at a CAGR of 10.7%, including 14.3% for the EV sector, 5.6% for the solar power industry and 9.3% in wind power applications. Traditional non-energy transition sectors should see a growth rate of 1.4%.

Regional copper price projections for 2025

The US copper market is expected to see a modest increase in demand, driven by government infrastructure projects and a growing emphasis on renewable energy. The supply-demand balance is likely to tighten, supporting higher copper prices.

China remains a critical player in the global copper market. The country’s focus on green energy and electric vehicles will drive significant demand. We project the Shanghai premium will average approximately $27 per tonne in 2025, reflecting a 25% decline from the estimated 2024 average. However, the long-term outlook remains positive, with expected stabilization and growth.

Key takeaways regarding copper price forecasts

The forecast for copper prices in the next 12 months is bullish. However, there are key risks to monitor, including a potential US economic recession and increased trade protectionism. The long-term forecast is also very constructive, driven by robust demand from the energy transition sectors and constrained supply dynamics.

Economists, analysts and investors should keep an eye on macroeconomic conditions, geopolitical events and industry-specific developments that could impact copper prices.

For more detailed insights and a comprehensive analysis, consider exploring Fastmarkets’ copper 10-year long-term forecast.