Copper prices have surged to a record high, continuing a strong rally as investors flock to metals amid expectations of tight supplies and a weakening US dollar. Benchmark three-month copper futures on the London Metal Exchange climbed to $US13,965 a tonne, marking a year-to-date increase of approximately 12 per cent. The broader base metals market also experienced gains, with aluminium reaching a three-year high.
Commodities have started the year strongly, supported by a declining US dollar, increased demand for tangible assets, and heightened geopolitical tensions linked to a more assertive foreign policy from the US. Besides copper, which is essential for the energy transition, precious metals have also reached all-time highs. Even crude oil, which faced challenges last year due to global oversupply concerns, has seen price increases in recent weeks.
The widespread gains in metals followed a decline in the US dollar index, which reached its lowest level in over four years. Former President Donald Trump had indicated a lack of concern regarding the dollar’s weakness, making commodities more appealing to a wider range of buyers. This has further fuelled the rally in copper and other metals, reflecting a combination of macroeconomic factors and rising investor interest.
These price movements highlight the interconnectedness of currency values, geopolitical events, and commodity markets. The expectation of continued demand and constrained supply continues to drive investor behaviour in the base and precious metals sectors.
