Copper Prices Slide as Investors Remain Cautious Ahead of US and China Data

The start of the trading week witnessed a decline in the price of copper on Monday, influenced by a firm dollar and cautious investor sentiment, as they eagerly awaited crucial economic indicators from both the United States and China. These indicators are anticipated to provide further insights into the future demand landscape.

As the clock struck 0200 GMT, the three-month copper contract on the Exchange Market recorded a 0.3% drop. This followed a minor decrease in the previous week.

In tandem with this, the most active copper contract for September on the Chinese Exchange Market also experienced a 0.4% reduction.

The momentum of the US dollar was a significant factor at play during the start of the week, exerting downward pressure on commodities priced in greenbacks.

The release of a non-uniform employment report last Friday depicted a scenario where the US economy added fewer jobs than initial expectations for the month of July. However, this was balanced by noteworthy wage gains and a decline in the unemployment rate to 3.5%, underscoring the ongoing tightness in the labor market.

With keen interest, global investors have turned their gaze toward forthcoming US and China inflation data, scheduled for later in the week.

Concerns lingered within the market regarding the demand for metals in China, given that previous policy measures had yet to generate the desired market enthusiasm or signal a robust demand trajectory for industrial metals.

In the Chinese market, copper premium in the spot market reached a one-month high last week, standing at 285 yuan (USD 39.63) per metric ton. However, supply is expected to improve in August as many smelters resume production after the summer maintenance period. This can further influence the dynamics of the copper market in the coming weeks.

The pressure on copper prices at the beginning of the week reflects the cautious stance of investors, who are eagerly awaiting economic data from the U.S. and China to gain more clarity on the demand outlook. Additionally, market participants are closely monitoring China's policy measures and supply dynamics to assess the medium-term prospects for copper. The initial trading day of the week saw copper prices soften as the stability of the US dollar and the impending release of pivotal economic data from both the US and China generated a cautious environment among investors. The focus of the market remained on gauging the metals demand landscape in China, while keeping an eye on the potential influence of increased supply in the coming month.