Copper price continues to move in tandem with the current supply/demand dynamics. While supply tightness has offered it steady support in recent weeks, signs of slowing demand have curbed its upside potential.
In the new week, the Comex copper price is set to react to the release of crucial economic data from the two top economies; China and the US. Indeed, it is already responding to China’s numbers released earlier on Monday. With the lower-than-expected figures, the asset lacks enough bullish momentum to break the crucial resistance at $5.50 a pound. Besides, the US nonfarm and CPI data are expected to heighten volatility on the US dollar and copper price by extension. At the time of writing, it was trading at $5.45.
Comex copper price drivers for the new week
Comex copper price lacked enough bullish momentum to break the resistance at $5.50 a pound as the market digested China’s latest industrial data. According to the National Bureau of Statistics, the country’s industrial production rose by 4.8% in November compared to the previous year. This level missed the analysts’ expectations of a 5% increase and marked its lowest growth since August 2024.
At the same time, China’s retail sales surged by 1.3% in November YoY compared to the forecast increase of 2.8% and the prior month’s 2.9%. Investments in property and other fixed assets also contracted sharper than the expected 2.3% by coming in at a 2.6% drop.
China’s struggling property market and subdued domestic demand have been weighing on copper price and the broader industrial sector. In addition to the latest data, recent figures showed that industrial profits dropped by 5.5% in October YoY. Notably, that was the highest decline since June. Besides, manufacturing activity contracted beyond analysts’ expectations in November as new orders and production growth slowed.
While this underwhelming situation from the top consumer and importer of industrial metals weighs on the red metal, the market is hopeful of significant improvement in the coming year. China’s policymakers have vowed to offer additional policy support that will boost domestic demand next year. For instance, on Saturday, the finance ministry announced its plans to issue ultra-long-term special government bonds in 2026. What’s more, the economy is still on track to hit the official growth target of 5% as exports to non-US markets increase.
China’s policy support, consumer sentiment, and economic data will remain key drivers of copper price into the new year. Meanwhile, investors are now eyeing the nonfarm payrolls and US CPI slated for release on Tuesday and Thursda,y respectively. These figures come about a week after the Fed’s interest rate decision that was announced, albeit an incomplete picture of the US inflation and job market.
The release of the highly anticipated data will offer cues on the Fed’s next move while heightening volatility in the US dollar. As a dollar-priced asset, a higher US dollar would render copper more expensive for buyers holding foreign currencies.
Comex copper price technical analysis
Comex copper futures began the new week on its front foot after last week’s weekly loss. However, in reaction to China’s recent data, the bulls lacked enough momentum to break the resistance at $5.50. While supply tightness has bolstered the red metal above the crucial support zone of $5.15, worries over slowing demand growth has curbed its upside potential.
In the short term, copper price may face resistance at $5.56, while $5.15 continues to offer steady support on the lower side. Even with further gains, it will likely remain within the borders of the months-long bullish channel. A rise past that bullish trendline will signal a breakout, with the bulls on track to record a fresh 5-month high.
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