Copper Nears Record Highs as Supply Constraints Support Metals
Copper climbed back toward record highs as supply constraints supported industrial metals, while gold, silver and platinum also advanced, Alpari said.
The metals market experienced an upturn in early August, driven by improved investor confidence and persistent supply limitations within the industrial metals sector, as noted by Alpari analyst Anna Bodrova.
Bodrova indicated that reports of a potential agreement between the United States and Iran regarding the reopening of the Strait of Hormuz contributed to enhanced market sentiment by alleviating concerns about accelerating inflation. Concurrently, industrial metals continue to receive support primarily from restricted supply, while the outlook for precious metals largely hinges on future signals from the U.S. Federal Reserve.
Gold is holding steady near US$4,100 per ounce, and silver is trading above US$59.5 per ounce. Both metals have seen gains for a second consecutive day, as expectations of further monetary tightening by the Federal Reserve diminished amid falling oil prices.
However, officials from the U.S. central bank continue to signal their readiness to raise interest rates if inflationary pressures intensify. Market participants are now awaiting new U.S. employment data, which could influence future expectations.
According to the analyst, platinum remains one of the strongest-performing precious metals, trading above US$1,700 per ounce, close to a seven-week high. The metal continues to benefit from improving market sentiment and limited supply.
Additional support came from a forecast by Valterra Platinum, the world's largest platinum producer, which anticipates continued demand growth due to the expansion of infrastructure supporting artificial intelligence technologies.
Copper remains the leading performer among industrial metals, with its price climbing above US$6.6 per pound again, nearing record highs.
The analyst attributed this increase primarily to declining global copper inventories. Ahead of an expected decision by U.S. authorities on possible import tariffs, suppliers increased shipments to the U.S. market.
More than 200,000 tonnes of copper were delivered to the United States in July, marking the highest monthly volume in over a decade. Simultaneously, inventories at London Metal Exchange warehouses fell to their lowest level in five months, while some of the metal was redirected to China to address local supply shortages.
Aluminum also extended its gains, with its price rising above US$3,210 per tonne, reaching its highest level in nearly one and a half months.
Bodrova stated that the market continues to be supported by lower production outside China, record-low inventories at London Metal Exchange warehouses, production constraints in China, and revised output forecasts by major producers.
According to the Alpari analyst, the metals market is gradually shifting its focus from geopolitical factors to underlying supply and demand fundamentals.
While easing inflation expectations continue to support precious metals, industrial metals remain the primary driver of the market, backed by limited inventories, structural supply shortages, and resilient demand from the energy sector, infrastructure projects, and artificial intelligence technologies.