Copper Heads for Weekly Drop

Copper futures climbed back above $5.8 per pound on Friday as the broader metals complex rebounded, but were still poised to finish the week lower as investors rushed for the dollar amid the escalating Middle East conflict and rising inflation concerns. The US-Israeli offensive against Iran has now entered its seventh day with no signs of easing, while Tehran launched a fresh wave of missile and drone strikes across the Gulf. Traders also contended with surging oil prices, which fueled fears of resurgent global inflation, supporting bets that the Federal Reserve will delay rate cuts and strengthening the dollar at the expense of other assets. In top consumer China, the government set a softer economic growth target of 4.5%–5% this week, reflecting persistent deflationary pressures and elevated US tariffs.

Copper futures fell to around $5.8 per pound on Thursday, giving back gains from the previous session as the dollar strengthened amid heightened uncertainty surrounding the US-Iran conflict. The US-Israeli campaign against Iran has now entered its sixth day, keeping markets cautious about further escalation and the risk of a prolonged confrontation. Reports also indicated that Iranian operatives had reached out to the US to explore possible peace talks, though Tehran later denied the outreach. In top consumer China, the government set a softer economic growth target of 4.5%–5% as policymakers grapple with persistent deflationary pressures and higher US tariffs. The country’s 15th Five-Year Plan also outlined increased investments in innovation, high-tech industries, and scientific research, alongside measures to boost household consumption as a share of overall economic output.

Copper futures rose toward $5.9 per pound on Wednesday, ending a two-day decline and following a rebound across the broader metals market as investors monitored developments in the Middle East. The US-Israeli war on Iran entered its fifth day, with US President Donald Trump expressing concern that the strikes could bring a new Iranian leadership as troubling as the previous regime, highlighting the conflict’s uncertain trajectory. Earlier this week, copper had been pressured as the Middle East tensions boosted the US dollar and raised risks to global manufacturing demand. Traders also scaled back expectations for Federal Reserve rate cuts, now anticipating the next reduction in September instead of July. Meanwhile, investors awaited policy guidance from China’s ongoing “Two Sessions” gathering.