Copper price analysis: futures waver as US-Iran war weighs on the market sentiment

Copper price continued to waver between subtle gains and losses on Thursday as investors weigh the back-and-forth threats from the US and the Islamic Republic of Iran. On the one hand, the steady long-term outlook continues to offer support to the industrial metal. However, as a barometer of global economic health, Dr Copper is under pressure from the ongoing geopolitical tensions and concerns over higher interest rates. 

Copper price wavers on heightened uncertainties 

Copper price and the broader financial market continue to sway in tandem with the political and economic mood at the global front. On Wednesday, Trump stated that the US-Iran peace talks were in the “final stages”. He also added that he has called off the planned military strikes against Iran to allow for the negotiations.

Notably, the US President has made some optimistic remarks over the issue, only for tensions to resurge. On its part, Iran has warned that it will strike beyond the Middle East if the US renews its strikes on the country. At the same time, Israeli officials has indicated that renewed conflict against the Islamic Republic of Iran is being actively considered. 

Amid these heightened tensions, investors are keen on the Pakistan-led mediations. The spokesperson of the Iranian Ministry of Foreign Affairs has said that Tehran has received the US proposal to end the ongoing war and is reviewing it.

Copper, which has a wide array of electrical and industrial uses, is considered a barometer to measure the global economic health. For instance, the persistent uncertainties stemming from the US-Iran war have dented the global growth outlook as investors worry about higher interest rates. While the long-term demand outlook remains steady, there has been a decline in enthusiasm over the demand of a metal used in AI data centers, clean energy, and overall modernization.

In the ensuing sessions, copper price is set to remain sensitive to the market sentiment and risk appetite. Investors will remain keen on the headlines of the geopolitical tensions in the Middle East.

Copper price technical analysis

Comex futures, the benchmark for North American copper trading, rebounded earlier on Thursday before erasing some of those gains. In the previous session, it dropped to a two-week low at $6.15 a pound. It has since recouped most of those losses to trade at $6.27 at the time of writing. 

The heightened volatility observed in recent sessions is largely founded on the ongoing geopolitical uncertainties and their impact on Dr Copper.  A look at its daily trading chart signals that the conventional barometer for economic health may remain volatile while still being range-bound.

On the one hand, Comex copper price is trading above the 25 and 50-day EMAs. Besides, it has held steady within the bullish channel that has shaped its price movements for close to a year. These technical indicators point to further gains in the short term. 

However, at an RSI of 54, the red metal will likely continue to trade within a range as investors eye the ongoing conflict. Based on these technical indicators, as well as the fundamentals, the range between Wednesday’s intraday low of $6.15 and the resistance at $6.38 is worth watching. Past that zone, the bulls will be eyeing the next target at $6.45. On the flip side, a decline past the current trade range will have the bulls defending the support at $6.09 as they strive to maintain copper price within the months-long channel.