Whalesbook
Copper Faces Potential Downturn
Copper prices, which recently climbed from $8,000 to approximately $14,000 per metric tonne, are showing signs of peaking. This surge was largely fueled by unexpected supply disruptions across major global mining operations. Issues ranging from environmental and procedural concerns to extreme weather events like rain and mudslides crippled production, leading to the sharp price increase.
However, the tide is expected to turn. Navneet Damani, Head of Commodity and Currency Research at Motilal Oswal Financial Services, noted that the world is not currently facing a copper shortage, with ample supply available globally. "If supply starts coming back into the market post June 2026, we will be a well-supplied market, and prices could take a pause or probably a reasonable correction over the next two to three to six months," Damani stated. Near-term downside levels for copper are projected around $11,500–$12,000 per metric tonne, with a significant rally only likely if silver experiences another surge or the dollar index weakens substantially.
Silver's Dollar-Dependent Trajectory
Silver prices have also seen recent spikes, though these are attributed more to market momentum than underlying fundamentals. Damani anticipates that prices above $100 per ounce would likely face sharp reactions. He forecasts a broader, sustainable range for silver between $65 and $95 per ounce, contingent on global currency movements.
Demand for silver remains tied to sectors like solar energy and AI-driven industrial applications. Yet, its price trajectory will be heavily swayed by the dollar index. A weakening dollar, potentially moving towards the 92–94 range in the coming quarters, could offer temporary support to commodities including gold, silver, and copper. Nevertheless, sustained rallies are deemed difficult to justify without stronger fundamental demand signals.