Copper

Can silver and copper hold their ground, or are sharper declines on the horizon? The price action suggests a resumption of the bearish trend could be in the cards.

Traders are eyeing China’s stimulus announcement on Friday. Will it be substantial enough to counter weak growth and Trump’s looming 60% tariffs? The market reaction for USD/CNH, iron ore and copper hinges on the detail.

Iron ore, copper and silver, along with the Australian dollar, were among the markets hardest hit by China’s latest stimulus announcement, falling heavily as it became clear the objective of policymakers is to stablise growth, not see it accelerate meaningfully as seen in other state interventions of the past. The “bazooka” many headlines and bullish narratives were based upon ended up being yet another peashooter.

Cyclical asset classes have performed well recently, benefitting not only from ongoing hopes for a soft landing for the global economy but also expectations for substantially lower interest rates and a weaker US dollar. But what if markets, collectively, are wrong about the outlook again like were at the start of the year? We look at the implications for the Dow Jones Industrial Average, copper, crude oil and the Aussie dollar.

We’ve seen plenty of short squeezes before that have quickly run out off puff. But with speculation swirling that policymakers may follow up Tuesday’s monetary policy easing with fiscal stimulus ahead of Golden Week holidays, that alone may be enough to promote further gains in the days ahead.

Gold, silver and copper were dragged lower with appetite for risk on Tuesday, although it may be the latter two which show the greater potential for bears going forward.

COMEX copper is one of the most interesting charts out there right now, providing something for bulls and bears depending on how the near-term price action evolves. Whichever way the price breaks, you get the feeling the move could easily extend, potentially providing decent trade opportunities for those with a little patience.

Bond traders are stepping back into the market on bets that the Fed will deliver a dovish hold today, which weighed on the US dollar and supported gold, silver and copper ahead of today’s FOMC meeting.

AUD/USD has equaled its longest losing streak since August 2019, hammered by deteriorating sentiment towards the outlook for the Chinese economy and investor risk appetite, especially towards big tech. But with signs of stablisation in commodity and US stock futures, the grounds for a squeeze higher are growing.

AUD/USD tracked copper prices lower for a sixth day, during its worst day in six weeks. Whilst both markets shows the potential for further losses, these may not be the ideal levels for bears to enter.

It has been a turbulent 24 hours for markets with Wall Street indices extending losses, dragging AUD/USD and copper prices lower.