Copper prices declined on Thursday as some traders and investment funds moved to take profits from long positions ahead of the US employment report, which is expected to influence the path of interest rates and the direction of the dollar.

The benchmark three-month copper contract on the London Metal Exchange (LME) fell 0.2% to $9,994 per metric ton by 10:32 GMT, retreating from Wednesday’s three-month high of $10,020.50.

Traders reported reduced market activity amid investor caution ahead of the June US non-farm payrolls report, which is expected to show a slight uptick in unemployment.

Weaker jobs data could raise concerns over a slowing US economy, potentially giving the Federal Reserve room to begin cutting interest rates — a scenario that would likely weigh on the dollar.

A softer dollar is typically supportive for industrial metal prices, as it makes dollar-denominated commodities cheaper for buyers using other currencies.

Copper is also being affected by an ongoing US investigation into potential tariffs on copper imports, which are widely used in the power and construction sectors. Any new tariffs could tighten supply and drive prices higher on US-based COMEX futures.

The price premium between COMEX copper and LME copper has widened to around $1,300 per ton, incentivizing producers and traders to redirect shipments to the US over other markets.

"While US copper imports haven't yet been hit by tariffs, the market is already pricing in that risk," said Tom Price, analyst at Liberum.

Most copper shipments headed for the US are being pulled from LME-registered warehouses. Copper inventories in the LME system have fallen 65% since peaking in February 2025, now standing at 94,325 tons.

Cancelled warrants — metal scheduled for withdrawal from warehouses — currently account for 34% of inventory, or around 31,900 tons, awaiting shipment.

However, recent data suggests that the spread between the spot copper price and the three-month forward contract is beginning to attract new inflows into the LME.

At Gwangyang port in South Korea, LME warehouse stocks rose by 2,250 tons this week, while stocks in Kaohsiung, Taiwan increased by 1,250 tons.

Other metals

Aluminum fell 0.4% to $2,609 per ton

Zinc dropped 0.3% to $2,749

Lead rose 0.4% to $2,068

Tin slipped 0.2% to $33,655

Nickel gained 0.7% to $15,405 per ton

Meanwhile, the US dollar index rose 0.4% to 97.1 by 15:46 GMT, reaching a session high of 97.4 and a low of 96.6.

In US trading, copper futures for September delivery fell 0.8% to $5.15 per pound by 15:46 GMT.

Bitcoin continued its rise on Thursday, extending gains from the previous session amid new signs of progress in US trade relations, despite ongoing trader caution ahead of a series of important US economic data releases later in the day.

The world’s largest cryptocurrency appeared to have broken out of its trading range between $103,000 and $108,000 on Wednesday, though it remains uncertain whether this price breakout will sustain.

Bitcoin rose 2.3% to $109,613.8 by 05:15 GMT. Broader cryptocurrency prices also gained amid improved risk appetite. Strong gains in US markets overnight — with the S&P 500 reaching a new record high — helped boost sentiment.

Trade optimism boosts Bitcoin

Bitcoin benefited from improved risk appetite following the announcement of a US-Vietnam trade deal, Washington’s third agreement ahead of the July 9 tariff deadline.

Markets were also encouraged by Washington’s easing of some chip export restrictions to China after an initial trade agreement was reached in June.

This trade progress raised investor hopes for more US trade deals before next week’s deadline. US officials said a deal with India is close, though talks with Japan and South Korea have faced setbacks.

President Donald Trump hinted he does not plan to extend the July 9 deadline, after which higher tariffs will be imposed on several major trading partners.

Tax bill and jobs report in focus

Attention also centered on the massive tax bill in Congress, which Trump said the House would vote on later Thursday. However, reports indicate the bill is still under study and discussion in the House.

Preliminary votes show at least five Republicans oppose the bill, potentially jeopardizing its passage.

Key concerns relate to the bill’s potential impact on national debt and the country’s fiscal health, with critics warning it could increase economic risks in the US.

A series of US labor market data will be released later Thursday, most notably the June nonfarm payrolls report. Expectations of Federal Reserve rate cuts are rising, with any strong signals of labor market slowdown likely to increase chances of monetary easing.

Does eurozone money supply growth support Bitcoin’s rise?

While it is difficult to pinpoint a single driver for Bitcoin’s rise on Wednesday, the broad money supply (M2) in the eurozone reaching a record high in April likely played a significant role. Data released Monday showed 2.7% year-on-year growth, aligning with the US’s expanding monetary base.

Meanwhile, ADP data showed US private sector jobs declined by 33,000 in June.

Some market participants view weak demand for leveraged Bitcoin positions as reflecting rising recession fears, especially amid escalating global trade tensions. Trump threatened to raise tariffs on Japanese goods above 30% if no deal is reached by July 9.

In this context, eurozone ambassadors asked EU Trade Commissioner Maroš Šefčovič to take a tougher stance during his Washington visit this week, according to the Financial Times. Some European capitals have called for lowering the current 10% mutual tariffs, despite ongoing internal disagreements over the merits of retaliation.

Options markets and China demand indicators show waning enthusiasm

To gauge derivative market weakness, Bitcoin options markets are instructive. If traders expect a sharp drop, the 25% delta skew rises above 6% as demand for put options exceeds call options.

Currently, this indicator stands at 0%, unchanged from two days ago, indicating the market sees balanced odds of upward or downward moves. While reflecting subdued sentiment at the \$109,000 level, this is an improvement from the pessimism recorded on June 22.

Despite Bitcoin reaching a three-week high, investor appetite in China has sharply declined, according to stablecoin demand indices.

The current 1% discount on Tether (USDT) versus the US dollar in China — the deepest since mid-May — reflects fading confidence in Bitcoin’s recent gains.

Trader concerns over ongoing trade war fallout have increased, especially after Bitcoin exchange-traded funds (ETFs) saw net outflows of \$342 million on Tuesday. Weak derivative market activity mirrors broader economic uncertainty.

Oil prices fell on Thursday amid concerns over the possible reinstatement of US tariffs, raising fears about global demand ahead of an expected supply increase from major producers.

Brent crude futures dropped 58 cents, or 0.8%, to \$68.53 per barrel by 09:42 GMT. US West Texas Intermediate (WTI) crude fell 57 cents, or 0.9%, to \$66.88 per barrel.

Both benchmarks had reached their highest levels in a week on Wednesday after Iran announced it was suspending cooperation with the International Atomic Energy Agency, sparking fears that the ongoing dispute over its nuclear program could escalate into armed conflict.

Prices were also temporarily supported by a preliminary trade agreement between the US and Vietnam, boosting market sentiment.

However, uncertainty around tariffs continues to weigh on markets. The 90-day temporary freeze on higher US tariffs is set to expire on July 9, while trade negotiations with several major partners, including the European Union and Japan, remain unresolved.

Meanwhile, OPEC+ — the Organization of the Petroleum Exporting Countries and its allies led by Russia — is expected to agree on a production increase of 411,000 barrels per day at its meeting later this week.

Market pessimism deepened following a private survey showing a slowdown in China’s services sector activity in June — the largest oil importer worldwide — recording the weakest growth pace in nine months due to reduced demand and shrinking new export orders.

In the US, unexpected crude inventory data added to demand concerns in the world’s largest oil consumer.

The US Energy Information Administration reported on Wednesday that commercial crude stockpiles rose by 3.8 million barrels to 419 million barrels last week, while analysts polled by Reuters had expected a decline of 1.8 million barrels.

Analysts say markets will also be closely watching today’s US monthly jobs report, which is likely to influence expectations about the timing and scale of Federal Reserve interest rate cuts in the second half of the year.

Interest rate cuts could stimulate economic activity, which in turn might increase oil demand.

The dollar remained near its lowest level in three and a half years this week on Thursday morning ahead of the much-anticipated US jobs report, while a trade deal between the United States and Vietnam boosted expectations for similar agreements before the US tariffs take effect on July 9.

Sterling rose slightly after falling nearly 1% on Wednesday, following a statement from the UK Prime Minister’s office affirming Keir Starmer’s support for Finance Minister Rachel Reeves amid rumors of her potential dismissal over investor concerns about the UK’s financial situation.

UK government bond prices stabilized after a sharp sell-off on Wednesday, triggered by Reeves’ emotional appearance in Parliament and the government’s retreat on social care reforms due to party pressure.

The pound rose 0.2% to $1.3665, while the euro remained nearly unchanged at $1.180, close to its highest level since September 2021 recorded earlier this week. The Japanese yen edged down slightly to 143.80 yen against the dollar.

Carol Kong, currency strategist at Commonwealth Bank of Australia, said markets are worried about Reeves being replaced by someone less committed to fiscal rules and more willing to increase borrowing.

She added, “The pound may remain under downward pressure unless the UK government takes steps to restore market confidence in its public finances.”

The US Dollar Index, which measures the currency against a basket of six major currencies, held steady at 96.748, close to its lowest levels in over three and a half years, and is on track for a weekly loss of 0.5%.

The US Jobs Report

Attention turns to the US Department of Labor’s comprehensive June jobs report expected later today, forecasted to show the unemployment rate rising to 4.3%, the highest in over three and a half years, according to a Reuters poll.

A special report released Wednesday painted a bleak picture of the labor market, prompting traders to adjust expectations on the timing of Fed rate cuts. LSEG data showed markets are now pricing a 25% chance of a July rate cut, up from 19% the day before.

Max McKinney, global markets strategist at JPMorgan Asset Management, said, “Today’s data will again highlight growth concerns and likely increase pressure on the Fed to speed up rate cuts.”

He added, “With inflation remaining well above target more than unemployment, the Fed should hold its stance. One weak labor report alone shouldn’t be enough to change policy.”

Pending Trade Deals

Ahead of the July 9 tariff deadline, US President Donald Trump announced a trade agreement with Vietnam and suggested similar deals could be reached with other countries.

Despite limited details, Trump said Vietnamese exports will face a 20% tariff, while a 40% tariff will apply to goods transiting through Vietnam from third countries, aiming to prevent “trade circumvention.”

The Vietnamese dong hit an all-time low, with UBS analysts expecting the central bank to allow a gradual currency depreciation to ease the tariff impact on exporters.

Meanwhile, talks with other countries proceed slowly. Japan expressed reservations over certain terms citing “national interest,” while South Korean President Lee Jae-myung said negotiations with the US are not going smoothly and he cannot confirm if a deal will be reached before the July 9 deadline.

Meanwhile, US House Republicans voted in favor of a procedural step allowing discussion of Trump’s massive tax and spending bill, paving the way for a final vote. The bill is expected to add \$3.3 trillion to the rising national debt, raising global bond market concerns about government deficits, not only in the US but also in major economies like Japan.