LME Copper Retreats to $14,200 After Record High as Dollar Stabilizes

LME copper retreated to $14,273 per tonne, down 0.1%, a day after posting its highest-ever closing price, as a stabilizing dollar sapped momentum.

LME warehouse stocks remain at relatively low levels, with spot copper trading at a premium to futures, according to exchange data.

Copper fell as low as $14,149 per tonne Tuesday. Aluminum dropped 0.4% and nickel 0.5%. Citi reiterated its forecast for copper to reach $15,000 per tonne by year-end.

The next market signal is Fed Chair Kevin Warsh's Jackson Hole speech Friday, which could weaken the dollar and provide fresh momentum for dollar-denominated commodities.

Dollar Stabilization Saps Metal Momentum

Last week, US Treasury market intervention measures pressured the dollar and boosted metals prices. The dollar has stabilized this week, reducing that support. Treasury Secretary Scott Bessent offered no additional details on debt management reform Monday, cooling trading enthusiasm built around Treasury intervention.

Spot gold rose as much as 0.6% to $4,676.75 per ounce, its highest since May 14. US gold futures gained 0.8% to $4,734.50 per ounce. The Treasury announced last week it would double the size of its long-dated bond liquidity support buyback program, a move that sent gold prices sharply higher. Traders are also watching this week's US Personal Consumption Expenditures price index release for clues on the inflation path.

Supply Tightness Underpins Citi's $15,000 Target

LME copper inventories remain at relatively low levels, and the market worries insufficient new mine development could widen future supply deficits. Spot copper traded at a significant premium to futures, indicating intensifying competition for near-term physical supply. A large-scale warrant cancellation Monday drew market attention.

Citi reiterated its forecast for copper to reach $15,000 per tonne by year-end and recommended buying on dips once positioning retreats from elevated levels. The bank also raised its three-month gold target to $4,800 per ounce, maintaining its 6-12 month target at $5,000, citing declining real interest rates and the Fed's retreat from its hawkish stance.

Copper at $14,273 per tonne sits about 5 percent below Citi's year-end target, while aluminum and nickel fell alongside, showing the pullback was broad across base metals. The structural tension between energy-transition copper demand and supply bottlenecks from long mine development cycles and insufficient capital expenditure remains the core logic supporting a higher price floor. As Jackson Hole approaches, volatility in copper, gold, and other metals could amplify.

This article is for informational purposes only and does not constitute investment advice.