Copper Price Forecast: (HG=F) Market Holds $4.47 as Supply Risks and Fed Uncertainty Collide

Copper (HG=F) Holds $4.47 as Fed Uncertainty, Supply Shocks, and China Output Cuts Drive Volatility

Copper has steadied near $4.47 per pound after a turbulent month marked by global political tensions, production disruptions, and shifting demand expectations. The sideways move masks a deeper tug of war between bearish short-term headwinds and bullish long-term fundamentals. Prices have traded within a narrow range of $4.30 to $4.62, with technical support reinforced at $4.26 and $4.06, while resistance targets stretch toward $4.62 and $4.75.

Fed Credibility Crisis Weakens Dollar and Supports HG=F

The red metal’s latest rebound coincides with renewed weakness in the U.S. dollar following President Trump’s unprecedented move to announce the dismissal of Fed Governor Lisa Cook. The political shockwave raised doubts about the Federal Reserve’s independence, intensifying expectations for a September rate cut. The weaker greenback immediately lifted dollar-denominated commodities, pushing HG=F to two-week highs of $9,846 per metric ton on the London Metal Exchange, compared to $9,754 support at the 50-day moving average. A softer dollar continues to play a key role in stabilizing copper near $4.47 despite broader risk aversion.

China Production Cuts and Demand Dynamics in Focus

China, which consumes over 50% of the world’s copper, remains central to price movements. Refined copper output in July slipped to 1.27 million tonnes from June’s record 1.3 million tonnes, as Beijing cracked down on industrial overcapacity. Despite this pullback, demand has proven resilient, with first-half 2025 copper consumption stronger than expected according to BHP, whose copper earnings offset weakness in iron ore and coal. Looking ahead, Beijing’s stimulus measures, combined with long-term structural drivers like electrification and urbanization, are expected to underpin higher copper demand even if near-term industrial output moderates.

Chile Supply Shock Adds to Price Support

Supply-side risks remain pivotal. In Chile, the collapse at Codelco’s El Teniente mine forced regulators to impose new operational requirements. Codelco, the world’s largest copper producer, has already trimmed its annual forecast, reinforcing supply tightness. This disruption coincides with historically low inventories in some LME warehouses, narrowing discounts for immediate delivery and signaling that physical demand is running ahead of supply. Such factors continue to provide a bullish floor for HG=F, keeping prices supported despite external market volatility.

UBS Targets $11,000 by September 2026

Investment banks remain cautiously bullish on the medium-term outlook. UBS reaffirmed its copper forecasts through mid-2026 and set a new price target of $11,000 per metric ton by September 2026. The bank’s rationale is rooted in an expected recovery in global demand combined with a tightening concentrate market. Although inventories and weak short-term consumption trends have capped prices, UBS noted that strategies monetizing downside risks remain viable while the fundamental trajectory points higher.

Technical Pressures and the Risk of Further Pullbacks

From a chart perspective, copper futures have struggled since August’s tariff shifts caused a sudden 37% drop from all-time highs. A bearish death cross has emerged on the daily chart, suggesting continued short-term selling pressure. However, with RSI levels around 32, the market is entering oversold territory, raising the possibility of a technical rebound. For immediate trading, the $4.42–$4.50 band is critical. Breaking above resistance at $4.53 could open the door toward $4.62, while failure to hold $4.42 risks deeper declines to $4.35.

Long-Term Demand Story Remains Intact

Despite short-term volatility, copper’s long-term narrative is firmly bullish. BHP projects copper demand from data centers alone could rise sixfold to 3 million tonnes annually by 2050—equal to the combined output of the world’s top four mines. Global decarbonization, EV adoption, and urbanization reinforce the expectation that copper demand will expand steadily, regardless of interim corrections. This demand resilience was evident in BHP’s earnings, which highlighted copper’s ability to cushion weakness in other commodity segments.

Buy, Sell, or Hold Verdict on Copper (HG=F)

With HG=F trading near $4.47, the short-term technical setup leans cautious. The consolidation range between $4.30 and $4.62 must resolve, with downside risk toward $4.35 if support breaks. Yet supply disruptions, falling inventories, and bullish long-term fundamentals suggest any pullbacks will attract buyers. With UBS projecting $11,000 per metric ton by late 2026 and structural demand drivers in place, the medium- to long-term case remains intact. The immediate stance is Hold on copper, as traders await clarity from U.S. inflation data, Fed policy moves, and BOJ actions that will dictate dollar strength, but the longer-term view remains decisively bullish with $5 and above a realistic target once global growth stabilizes.

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