Copper Shrugs Off China Data

Base Metals

Copper: Copper prices are higher as some traders rolled forward positions ahead of a contract expiry this week, helping the market to set aside weak data and worries about the property sector in top consumer China for now. Benchmark three-month copper on the LME rose 1.9% to $11,730 after hitting a record high of $11,952 on Friday on worries about tight supply and then saw a sell-off amid renewed fears of the AI bubble bursting. Supply disruptions and continued shipments to the US are expected to offer copper a solid price floor but focus on demand in China will also play a large factor in price direction.

Disappointing economic reports out of China came out overnight, with retail sales much weaker than expected, while fixed asset investment fell 2.6%, which was worse than an expected -2.3% and below the previous -1.7% reading. China’s factory output growth slowed to a 15-month low, while retail sales posted their worst performance since the country abruptly ended its “zero-COVID” curbs, highlighting the urgent need for new growth drivers heading into 2026. The Financial Times reported that China’s President Xi even reacted to the investment report, where he apparently called government spending “reckless”. He criticized outsized investment zones and wasteful spending. He said government officials should pursue “genuine growth without exaggeration” and that “those who are unrealistic, hasty, reckless and haphazard in their efforts will be held strictly accountable”. China has recently pledged to keep expanding domestic demand and the broader economy in 2026.

Meanwhile, daily inflows to COMEX copper stocks, already at a record high, continued due to higher prices in the US. The US excluded refined copper from the 50% import tariffs that came into force in August but kept it under review, which has led to expectations that US tariffs on copper will be announced in mid-2026. That dynamic has lent continued support to LME -COMEX arbitrage, as US inventories of copper reach over 500,000 tons. As long as US prices remain elevated due to tariff expectations, flows into the US are expected, keeping LME-COMEX arbitrage trade going.

Zinc: Zinc fell 0.2% to $3,120.

Aluminum: Aluminum rose 0.4% to $2,880.

Tin: Tin gained 0.2% to $41,400.

Lead: Lead was down 0.6% at $1,956 after hitting $1,952 for its lowest since May.

Nickel: Nickel dropped 1.2% to $14,410.

Precious Metals

Gold: Gold prices are nearly 1% higher, as a weaker dollar and geopolitical tensions provided support, while speculation over the trajectory of US interest rates remains. Markets are currently pricing in two rate cuts from the Fed next year, with markets eyeing this week’s November nonfarm payrolls report and CPI report for further clues on monetary policy. Fed Chair Powell last offered remarks that were less hawkish than expected, sending yields and the dollar substantially lower, although longer-dated yields have climbed above pre-meeting levels. On the geopolitical front, Russia’s central bank said on Friday plans by the European Union to use Russian assets to extend a loan to Ukraine were illegal and that it reserved the right to employ all available means to protect its interests.

Markets will also monitor any news regarding the Supreme Court’s ruling on President Trump’s sweeping tariffs, as the president recently signaled that he expects an unfavorable ruling. President Trump reiterated on Tuesday that the effects of appealing the tariffs could be disastrous for the economy, signaling that he could be expecting an unfavorable ruling towards his trade policies. Trump did suggest that the tariffs could stay but would require a longer implementation process, while calling the ruling the greatest threat to national security in history. In a social media post on Sunday, Trump argued that his method of instituting tariffs is far less cumbersome than other methods, suggesting that if the court knocks down his tariffs, there are still feasible ways to implement them.

Silver: Silver futures are 3% higher at $63.97. Silver fundamentals have been supportive of prices as expectations that industrial demand for silver will pick up in the coming years. Sectors including solar energy, EV’s, data centers, and artificial intelligence will drive industrial demand higher through 2030, the Silver Institute industry association recently noted in a research report. Prices have also been supported by persistently low supplies and dwindling global inventories, which have contributed to a supply-demand deficit that is expected to be maintained over the coming years.

Platinum: Platinum is up 2% at $1,801.

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