Copper Prices Rise as U.S. Interest Rate Cuts and AI Bubble Concerns Shape Market Mood

Copper prices moved higher as global markets balanced two strong but opposing forces. On one side, slower U.S. consumer inflation revived hopes of U.S. interest rate cuts next year. On the other hand, growing talk around an artificial intelligence bubble kept gains in check.

The result was a cautious rise across key exchanges, reflecting optimism—but not euphoria—in the metals market. For investors tracking copper prices, the story this week was less about sharp moves and more about how sentiment is slowly shifting.

Market Performance: Copper Holds Firm Despite Weekly Pressure

Copper showed resilience across major global exchanges, even as the week ended mixed.

• The most-active copper contract on the Shanghai Futures Exchange (SHFE) closed daytime trading up 0.46% at 93,180 yuan per metric ton.
• Despite the daily rise, the contract ended the week 1.07% lower.
• Last week, copper on SHFE touched a record high of 94,030 yuan per ton, highlighting how elevated prices remain.

In London, the tone was slightly stronger.

• On the London Metal Exchange, three-month copper inched up 0.29%, trading at $11,812 per tonne.
• The contract is set to close the week 2.53% higher, showing steady support at higher levels.

These movements suggest copper prices are consolidating after hitting record zones, rather than losing momentum outright.

Main News: Inflation Data and Rate Outlook Drive Sentiment

The key trigger this week came from the United States. Consumer inflation rose more slowly than expected in the year ended November, according to data released on Thursday.

That single data point was enough to lift market expectations around U.S. interest rate cuts next year, offering support to commodities like copper, which often benefit from lower borrowing costs and a weaker dollar environment.

However, optimism remained measured.

• The Federal Reserve delivered a 25-basis-point rate cut last week.
• At the same time, it signalled that further cuts may not come quickly.

Market clarity has also been affected by statistical ambiguity following the earlier 43-day U.S. government shutdown, making investors more cautious when reading economic signals.

AI Bubble Concerns Cap Copper’s Upside

While copper is widely used in data centres and advanced technology infrastructure, concerns around an artificial intelligence bubble limited further gains.

Scepticism around AI-linked trades intensified after:

• A tech stock slump last week dented sentiment.
• Reports that Oracle’s data centre partner, Blue Owl Capital, backed out of a $10 billion deal for its next facility.

Since copper plays a key role in powering data centres, cooling enthusiasm around AI expansion reduced aggressive buying in copper markets.

Broader Metals Market: Mixed but Mostly Positive

Other base metals also reflected cautious optimism across global exchanges.

On the Shanghai Futures Exchange:

• Nickel surged 3.17%.
• Aluminium rose 0.89%.
• Zinc advanced 0.17%.
• Lead gained 0.42%.
• Tin jumped 2.40%.

On the London Metal Exchange:

• Nickel climbed 1.36%.
• Aluminium added 0.36%.
• Zinc rose 0.38%.
• Lead gained 0.69%.
• Tin advanced 1.40%.

Nickel prices found support after Indonesia’s mining association said the government would reduce annual nickel ore output to around 250 million tons, helping the metal rebound from earlier losses.

Company and Market Context

Copper remains a critical industrial metal, closely tied to global growth, infrastructure spending, and emerging technologies. Its use spans construction, power grids, electric vehicles, and data centres.

As markets weigh consumer inflation trends, U.S. interest rate cuts, and the sustainability of AI-led demand, copper prices continue to reflect a careful balance between optimism and restraint.

Summary

Copper prices edged higher as slower U.S. inflation revived hopes of rate cuts, offering support across global metals markets. Gains, however, were moderated by concerns around an artificial intelligence bubble and cooling sentiment in tech-linked trades.

With copper holding near record levels on both the London Metal Exchange and Shanghai Futures Exchange, the market is entering a phase of consolidation—driven by data, policy signals, and evolving global demand dynamics.