Copper prices rose slightly on Tuesday, supported by ongoing mining disruptions, but remained below the 16-month highs reached in the previous session due to the strength of the US dollar.

Three-month copper on the London Metal Exchange (LME) gained 0.3% to $10,684 per metric ton as of 09:40 GMT, after touching $10,800 on Monday — its highest level since May 2024.

Copper prices on the LME have risen 21% since the start of the year, driven in recent weeks by production problems at major mines in Chile, the Democratic Republic of Congo, and Indonesia.

Operations at Indonesia’s Grasberg mine — one of the world’s largest copper mines — have been halted for nearly a month following a deadly mudslide that killed seven workers. Additional disruptions have occurred at the Kamoa-Kakula mine in the DRC and the El Teniente mine in Chile.

Dan Smith, managing director at Commodity Market Analytics, said: “The disruptions are enormous, and so I expected copper to climb faster than it has, but the dollar has strengthened somewhat.”

He added that one bearish factor possibly explaining the slower rally is the slowdown in electric vehicle sales in several regions worldwide.

In China, the world’s largest metals consumer, average monthly growth in electric vehicle sales stood at around 36% in the first half of the year but slowed to 6% in August.

Smith noted that LME copper is approaching a key resistance range between $10,750 and $11,000 — a zone it has failed to break three times before, in May 2021, March 2022, and May 2024.

“If we retreat from this level,” he said, “it would be a strongly bearish technical signal.”

A stronger US dollar also limited copper’s gains, benefiting from weakness in the euro and yen. A higher dollar makes commodities priced in it — such as metals — more expensive for holders of other currencies.

Among other base metals, aluminum slipped 0.2% to $2,719.50 per ton, nickel was flat at $15,480, lead eased 0.1% to $2,003.50, tin fell 0.7% to $36,555, while zinc gained 0.3% to $3,015.

Chinese markets remain closed from October 1 to 8 for the “Golden Week” holiday.

Bitcoin remained largely stable on Tuesday after hitting new record highs above $126,000 in the previous session, supported by strong inflows into US spot exchange-traded funds (ETFs), growing hedging against the weakening dollar amid the prolonged US government shutdown, and the seasonal optimism known as “Uptober.”

The world’s largest cryptocurrency reached an all-time high of $126,186 on Monday but later pared gains as some investors took profits.

As of 02:05 a.m. Eastern Time (06:05 GMT), Bitcoin was up 0.4% at $124,427.9 after surging more than 10% last week.

ETF inflows and hedging against currency debasement support Bitcoin

Data from SoSoValue showed that US spot Bitcoin ETFs recorded net inflows of $3.2 billion for the week ending October 3, the second-highest weekly total since these funds were launched earlier this year.

On October 3 alone, daily inflows reached about $985 million.

This strong demand through ETFs allowed institutional investors to gain exposure to Bitcoin without direct ownership, boosting bullish momentum in the market.

The ongoing US government shutdown has also fueled the rally, as the political stalemate in Washington — which has delayed key economic data releases and heightened policy uncertainty — pushed investors toward hard, non-sovereign assets such as gold and Bitcoin.

This move is often described as a “debasement trade,” where capital shifts from fiat currencies into tangible or digital assets viewed as safer stores of value amid inflation or monetary easing.

It also coincides with the historically positive October trend — known among traders as “Uptober” — a period in which cryptocurrency returns tend to rise.

However, profit-taking followed the record peak, leading to a partial pullback in Bitcoin prices during Tuesday’s trading.

Galaxy Digital launches a competitor to Robinhood

Galaxy Digital (TSX: GLXY) announced the launch of its new “GalaxyOne” platform — a commission-free trading app for stocks and cryptocurrencies — in a direct challenge to Robinhood (NASDAQ: HOOD), whose shares fell 3% on Monday following the news.

The new platform offers services similar to Robinhood’s, including access to over 2,000 stocks and ETFs, as well as cryptocurrency trading and high-yield cash accounts.

Galaxy Digital’s shares rose 7% on Monday after the announcement.

Oil prices were steady on Tuesday as investors assessed a smaller-than-expected production increase by the OPEC+ alliance scheduled for November, amid concerns about a potential global supply surplus.

Brent crude futures rose by 9 cents, or 0.14%, to $65.56 a barrel as of 11:54 GMT, while US West Texas Intermediate (WTI) futures added 8 cents, or 0.13%, to $61.77 a barrel.

Giovanni Staunovo, an analyst at UBS, said: “Oil prices remain resilient as the market watches whether the increase in floating oil inventories will translate into higher stockpiles in OECD countries, while preliminary data from India suggest continued strong oil demand in September.”

The contracts had ended the previous session more than 1% higher after the Organization of the Petroleum Exporting Countries (OPEC) and its allies — including Russia and several smaller producers, collectively known as OPEC+ — decided to raise total output by 137,000 barrels per day starting in November.

The decision ran counter to market expectations for a bolder increase, signaling that the group remains cautious amid projections of a potential oversupply in the fourth quarter of this year and into next year, according to analysts at ING Bank.

On the demand side, India’s fuel consumption rose 7% year-on-year in September, according to data from the Petroleum Planning and Analysis Cell (PPAC) under the Ministry of Petroleum.

As for supply, J.P. Morgan reported that global oil inventories — including crude stored on tankers — rose every week during September, adding about 123 million barrels for the month.

In China, the government is accelerating the construction of oil storage sites as part of a campaign to strengthen its strategic reserves, according to official data, trade sources, and industry experts.

On the geopolitical front, tensions continue to lend support to oil prices, as the ongoing conflict between Russia and Ukraine keeps energy assets under pressure and heightens uncertainty over Russian crude supplies.

Industry sources said on Monday that Russia’s Kirishi refinery shut down its most productive distillation unit after a drone attack caused a fire on October 4, and recovery operations are expected to take about a month.

The US dollar rose against most major currencies during Tuesday’s trading as the government shutdown continued and concerns grew over its impact on the economy.

The most notable movement at the start of this week was the sharp decline in the Japanese yen, which fell by 1.6% against the dollar on Monday following Takaichi’s victory. Her unexpected win strengthened expectations for continued fiscal stimulus while reducing bets on an imminent interest rate hike by the Bank of Japan (BoJ). This uncertainty pushed both gold and bitcoin to record highs when priced in Japanese yen.

Although Takaichi’s post-victory statements about reconsidering the Bank of Japan agreement and “owning monetary policy” attracted attention, she has recently softened her tone opposing interest rate hikes, after having described them last year as a “stupid move.” This indicates that a full return to the peak of the Abenomics era is unlikely, especially since the Liberal Democratic Party (LDP) is currently governing as a minority government.

In contrast, reading the state of the US economy remains complicated due to the ongoing government shutdown, which has significantly reduced economic visibility. Still, this shutdown represents a tangible drag: S&P Global Ratings estimates it could subtract between 0.1 and 0.2 percentage points from GDP growth for every week it continues.

As for the limited data available — such as the JOLTS report and the September estimates from ADP and Revello Labs — they continue to indicate that the United States is experiencing a “no hiring, no firing” economy, characterized by extremely slow turnover and modest but positive job gains.

So, what can the Federal Reserve (Fed) do under these circumstances?

Despite the shutdown and the lack of new official data, the Fed is forced to draw signals from private-sector indicators and its broad communications network with businesses. So far, markets are pricing in another 25-basis-point interest rate cut by the end of the month.

Here lies a key paradox: how can the apparent weakness in the labor market — slow or stagnant job growth — coexist with solid economic growth projections such as the Atlanta Fed’s estimate of 3.9% GDP growth in the third quarter?

The answer likely lies in the sharp rise in labor productivity. GDP measures total economic output, and if companies produce more goods and services without hiring additional workers, output rises even if employment does not.

This trend is driven by strong capital expenditure (Capex) on technology, especially artificial intelligence (AI) and automation.

Companies are investing capital to improve the efficiency of their existing workforce, increasing productivity per working hour and raising GDP while the number of employees remains unchanged.

The result is a temporary but strong disconnect between rising profits and production on one hand and slow job creation on the other.

The “weakness” in the labor market is not only the result of weaker demand but also of reduced labor supply.

Structural factors — such as lower immigration rates and demographic trends like the retirement of baby boomers, as noted by the St. Louis Federal Reserve — have reduced the “equilibrium” employment growth rate needed to maintain stable unemployment.

This means limited job gains are not necessarily a sign of an impending recession, but rather of a structural scarcity in labor supply.

Moreover, short-term GDP figures can be affected by volatile factors such as sharp declines in imports, creating an impression of stronger growth that does not immediately reflect in job creation.

In the end, these interactions highlight an economy growing more efficiently, increasingly driven by capital-intensive technology, with limited labor-force expansion.

As for central banks, this week remains busy; the minutes of the Federal Open Market Committee (FOMC) meeting are expected on Wednesday, followed by a speech from Fed Chair Jerome Powell on Thursday.

Elsewhere, the Reserve Bank of New Zealand (RBNZ) will be in focus on Wednesday, with a widely expected 25-basis-point rate cut, while the Norges Bank will speak today and the Reserve Bank of Australia (RBA) on Friday.