Copper prices rallied to three-month highs on Thursday on a weaker dollar, concerns about supplies and speculative buying.

Copper three-month futures rose 1.6% at the London Metals Exchange to $9867 a ton, the highest since March 28.

The dollar index hit early 2022 lows amid increasing concerns about the Fe’s independence amid constant Trump attacks on Fed Chair Powell.

A weaker dollar makes commodities cheaper to holders of other currencies. 

Price Premium Hints at Shortage

The price premium between the spot copper contract in London and the three-month future rose to $200 a ton from $101 on Wednesday.

Thus likely shows concerns about supply shortages compared to demand, especially in China.

Copper futures rose 0.6% at the Shanghai Exchange to 69,000 yuan a ton, the highest since June 11.

Technical Breach

A breach of the $9800 barrier on Thursday boosting technical purchases on copper London contracts.

Copper is up 22% at the London Exchange compared to November 2023 lows at $8105.

In the US, Copper Comex futures rose 2.7% to $5.05 a pound, raising its premium over the London contract to $1277 a ton, the highest since April.

Such a premium is due to expectations of Trump tariffs on the metal.

As for Other metals:

Aluminum rose 0.5% in London to $2575 a ton

Lead rose 0.6% to $2044  

Nickel added 0.8% to $15,190

Zinc rose 1.4% to $2743

Tin rose 0.6% to $33400

Otherwise, the dollar index fell 0.5% as of 14:57 GMT to 97.1, with a session-high at 97.6, and a low at 97.00, the lowest in three years.

Copper futures rose 2.8% in American trade as of 14:54 GMT to $5.11 a pound.

Bitcoin expanded its gains for the fourth straight session, trading above $107,000, or just 4% off recent record highs amid strong investments into bitcoin ETFs, amounting to $547 million on Wednesday.

Strong Institutional Demand

Bitcoin is buoyed by rapidly increasing institutional demand, with SoSoValue data showing net investments into bitcoin sport ETFs at $547 million, with total weekly inflows amounting to $1.49 billion so far.

Otherwise, major corporations continue to add to their bitcoin holdings, with Japan’s MetaPlanet adding 1234 units on Thursday, raising its total holdings to 12,345 units.

PtoCap BTC also bought 1208 bitcoins, raising total holdings to 4932 units.

Bitcoin recently hit a low of $98,200 on Sunday but avoided closing below $100,000, with the currency regaining its strength on Monday, thus recovering until $107,000.

An extended rally would bring the price to near the recent record highs at $112,000.

RSI technical analysis points to upward momentum, which is  confirmed with the MACD.

Some analysts expect bitcoin to rise between 50% and 80% by October, as it might repeat its market structure from 2020, with a stabilization period followed by a $13,000 to a $40,000 surge.

The US dollar fell to three-year lows after reports that US President Donald Trump is considering nominating Fed Chair Jerome Powell’s successor early as a way to undermine him.

The dollar is down 0.6% against a basket of major rivals, hitting early 2022 lows.

The dollar continues to sustain heavy losses this year as investors lose confidence in the US dollar due to Trump’s trade wars and the government’s yawning budget deficit. 

Trump Versus Powell 

Trump once again criticized Powell for refusing to cut interest rates, and asserting Powell will leave his position soon.

Powell told the Senate of the need to be cautious with monetary policies, as Trump’s tariffs represent a risk to inflation.

Powell warned that while Trump’s tariffs could cause a one-time hike in prices, the risk of sustained inflation is big enough to force the Fed into more caution about rate cuts.

The Wall Street Journal reports that Trump is considering choosing and announcing his successor by September or October as a way to undermine him.

Euro and Sterling Surge

The euro is up 0.7% today against the greenback to $1.174, the best since September 2021, after NATO allies vowed to raise defense spending to 5% of total GDP by 2035.

Sterling also rallied by a similar percentage to $1.376.

The dollar index is down 10% so far this year, but it faces even more pressures as the Federal Reserve gears up towards multiple interest rate cuts this year.

Fed official Michelle Bowman said on Monday that the time for an interest rate cut is approaching amid potential risks to the labor market. 

The odds of a Fed 0.25% rate cut at the July meeting rose from 15% to 23% according to the Fedwatch tool.

The odds of a Fed September rate cut rose from 68% to 78%. 

The bonds market is mostly stable, with two-year US treasury yields down 0.01% to 3.77%.

Gold prices rose in European trade on Thursday on track for the second straight profit away from recent two-week lows as the US dollar swoons against major rivals. 

It comes amid renewed concerns about the independence of the Federal Reserve after renewed attacks by US President Donald Trump against Fed Chair Jerome Powell.

Prices

Gold prices rose 0.35% today to $3343 an ounce, with a session-low at $3329.

On Wednesday, gold rose 0.25%, the first profit in four days away from a two-week trough at $3295.

US Dollar

The dollar index fell 0.45% on Thursday, sharpening losses for the fourth straight session and plumbing three-year lows at 97.27 against a basket of major rivals.

A weaker dollar makes the greenback-denominated gold futures cheaper to holders of other currencies.

Trump attacks Powell

Trump once again criticized Powell for refusing to cut interest rates, and asserting Powell will leave his position soon.

Powell told the Senate of the need to be cautious with monetary policies, as Trump’s tariffs represent a risk to inflation.

Powell warned that while Trump’s tariffs could cause a one-time hike in prices, the risk of sustained inflation is big enough to force the Fed into more caution about rate cuts.

The Wall Street Journal reports that Trump is considering choosing and announcing his successor by September or October as a way to undermine him.

US Rates

Fed official Michelle Bowman said on Monday that the time for an interest rate cut is approaching amid potential risks to the labor market. 

The odds of a Fed 0.25% rate cut at the July meeting rose from 15% to 23% according to the Fedwatch tool.

The odds of a Fed September rate cut rose from 68% to 78%. 

SPDR

Gold holdings at the SPDR Gold Trust fell by 2.29 tons yesterday to a total of 953.39 tons.