Copper prices hit a new record above $14,000 per metric ton during Thursday’s trading, driven by heavy speculative buying amid expectations of stronger demand, alongside a weaker US dollar and rising geopolitical concerns.

Investors largely brushed aside warnings from some analysts that the sharp price surge could curb real demand from industrial consumers, and that the rally is not fully supported by current supply-and-demand fundamentals.

The benchmark three-month copper contract on the London Metal Exchange jumped 9% to a record high of $14,268 per ton, before paring gains to $14,147 by 13:15 GMT. In official open-outcry trading on the exchange, copper rose 6.6% to $13,950 per ton.

Neil Welsh of Britannia Global Markets said in a research note: “Copper recorded its biggest daily gain in years, driven by intense speculative activity from bullish investors in China.” He added that “investors are flowing into base metals on expectations of stronger economic growth in the United States, and increased global spending on data centers, robotics, and energy infrastructure.”

Copper, which is widely used in the energy and construction sectors, is a key metal in the energy transition. However, exchange-monitored global inventories remain elevated, particularly in the United States, raising questions over the sustainability of the current price rally.

In China, the most actively traded copper contract on the Shanghai Futures Exchange closed the daytime session up 6.7% at 109,110 yuan per ton (about $15,708.77), after hitting a record intraday high of 110,970 yuan.

These gains came despite weak spot demand in China, the world’s largest copper consumer. The Yangshan copper premium, a key indicator of Chinese demand for imported copper, fell to $20 per ton on Wednesday, its lowest level since July 2024, down from $55 in December.

Traders said copper prices have also been lifted by a broader shift in investor appetite toward tangible assets, which has pushed gold and silver to record highs amid escalating geopolitical tensions.

A weaker US dollar, hovering near multi-year lows, has further supported metal prices by making dollar-denominated commodities cheaper for buyers using other currencies.

Elsewhere on the London market, aluminum rose 2.1% to $3,325.50 per ton, its highest level since April 2022, while zinc climbed 4.4% to $3,513, the highest since August 2022. Lead gained 1.6% to $2,049, nickel jumped 3.6% to $18,025, and tin rose 1.5% to $56,795 per ton.

Bitcoin slid toward the $88,000 level on Thursday, remaining under pressure despite a weaker US dollar and a strong rally in gold prices, as investors digested the Federal Reserve’s decision to keep interest rates unchanged.

The world’s largest cryptocurrency fell by about 1% to trade at $88,201.6 by 01:56 a.m. US Eastern Time (06:56 GMT).

Bitcoin has remained range-bound this week, trading between $86,000 and $89,000, posting only modest gains of less than 1% since the start of January.

Bitcoin underperforms despite gold rally and weaker dollar

The subdued performance in cryptocurrencies stood in sharp contrast to the strong rally in the gold market, where prices surged above $5,500 per ounce for the first time on Thursday, supported by robust safe-haven demand, escalating geopolitical tensions, and expectations surrounding Federal Reserve policy.

Although Bitcoin is often described as “digital gold,” it continued to move within a narrow range and failed to benefit from the broader flight to safe-haven assets.

On Wednesday, the Federal Reserve kept its benchmark interest rate unchanged in a range of 3.50% to 3.75%, stepping back after three consecutive rate cuts.

Fed Chair Jerome Powell said policymakers need more evidence that inflation is moving sustainably toward the 2% target before considering further easing, citing continued strength in the labor market and stable economic growth.

Powell’s comments struck a cautious tone, reinforcing expectations that any future rate cuts will be gradual and data-dependent. This weighed on risk-sensitive assets, including cryptocurrencies, as investors reassessed liquidity prospects over the coming months.

White House moves to break regulatory deadlock

In a separate development, Reuters reported that the White House plans to hold a meeting next week with senior executives from the banking and cryptocurrency sectors, in an effort to break a deadlock over key US legislation regulating digital assets.

According to the report, the meeting will be organized by the administration’s crypto council and will focus on contentious provisions related to whether crypto firms should be allowed to offer yields or rewards on dollar-pegged stablecoins.

The move reflects President Donald Trump’s push to advance digital asset legislation after months of disagreement between banks and crypto companies over competitive risks.

The summit could help pave the way toward a compromise on the so-called “Clarity Act,” which aims to establish a comprehensive federal regulatory framework for digital assets.

Crypto advocates argue that offering yields is essential to attract users, while banks warn it could accelerate deposit outflows and threaten financial stability. These concerns have stalled progress on the bill in the US Senate, according to Reuters.

Altcoins continue to retreat

Elsewhere in the crypto market, most major altcoins continued to decline on Thursday amid a broadly risk-averse environment.

Ethereum, the world’s second-largest cryptocurrency, fell about 1.5% to $2,958.92, while XRP, the third-largest digital asset, also slipped 1.5% to trade at $1.88.

Brent crude futures surged on Thursday to their highest levels in four months, driven by mounting concerns over the possibility of a US military strike on Iran, OPEC’s fourth-largest producer, which pumps around 3.2 million barrels per day.

John Evans, analyst at PVM, said that “the immediate concern for the market is the potential for collateral damage if Iran were to strike its neighbors, or more importantly if it were to close the Strait of Hormuz, through which roughly 20 million barrels per day of oil flows.”

Brent crude rose by about $1.65, or 2.4%, to $70.05 per barrel by 13:08 GMT. During the session, prices touched $70.35 per barrel, the highest level since late September. Brent is on track to post monthly gains exceeding 15% in January, marking its largest monthly rise in four years.

US West Texas Intermediate crude also climbed by around $1.59, or 2.5%, to $64.80 per barrel. Earlier in the session, WTI breached the $65 per barrel level, likewise hitting a four-month high. The benchmark is heading for monthly gains of about 13%, its strongest since July 2023.

US President Donald Trump has stepped up pressure on Tehran to halt its nuclear program, warning of possible military strikes, as a US naval group arrived in the region.

Reuters reported, citing informed US sources, that Trump is weighing options that include limited strikes targeting Iranian security forces and leadership, in an effort to spark internal unrest that could lead to the collapse of the country’s rulers.

Some analysts expect further upside in oil prices due to tensions linked to Iran. Citi analysts said in a note on Wednesday that “the probability of an attack on Iran has lifted the geopolitical risk premium in oil prices by around $3 to $4 per barrel,” adding that further escalation could push Brent toward $72 per barrel over the next three months.

Elsewhere, production is gradually resuming at Kazakhstan’s giant Tengiz oil field after electrical fires last week curtailed output, with a return to full capacity targeted within a week.

In the United States, the world’s largest oil producer and top exporter of liquefied natural gas, oil and gas producers have begun restarting wells after disruptions caused by the winter storm “Fern” over the weekend.

Giovanni Staunovo, analyst at UBS, said: “Disruptions in Kazakhstan, whether at the Caspian Pipeline Consortium terminal or at the Tengiz field, removed significant volumes of oil from the market. Combined with cold weather in the US that temporarily curtailed oil production, the oil market has become tighter than previously expected.”

The US dollar edged slightly higher on Thursday, but remained near multi-year lows, as limited support from the Federal Reserve failed to offset persistent concerns over US policy that continued to weigh on investor sentiment.

The dollar ended last week with its largest weekly loss since April, as investors grew increasingly uneasy about their exposure to US assets amid escalating debate over Washington’s stance on Greenland.

US President Donald Trump said on Tuesday that the dollar’s value was “excellent” when asked whether it had fallen too far, a comment that added to pressure on the currency after it touched a four-year low.

The dollar posted gains on Wednesday, snapping a four-day losing streak, after Treasury Secretary Scott Bessent reaffirmed the United States’ preference for a strong dollar policy. However, that momentum failed to carry through into Thursday’s session.

Federal Reserve Chair Jerome Powell indicated that interest rate cuts could take longer to materialize, while some economists argue that the US economy does not currently require further monetary easing.

David Doyle, head of economics at Macquarie Group, said: “While uncertainty remains elevated, particularly with a new Fed chair expected to be appointed in the coming months, our base case is that the rate-cutting cycle has come to an end, with an improvement in the labor market ahead.” He added: “We see the next move as a rate hike, possibly in the fourth quarter of 2026.”

Analysts believe the dollar’s performance will hinge largely on developments surrounding the Federal Reserve’s independence, including an anticipated US Supreme Court ruling on President Trump’s attempt to remove Fed Governor Lisa Cook.

Against a basket of major currencies, the dollar index rose 0.1% to 96.33, hovering near Tuesday’s four-year low of 95.566.

Euro draws renewed ECB attention

The euro eased slightly to $1.1948 after briefly breaking above the $1.20 level on dollar weakness, following warnings from European Central Bank policymakers about the potential deflationary impact of a rapidly strengthening single currency.

Geoff Yu, senior macro strategist for EMEA at BNY, said: “While EUR/USD has remained above the ECB’s baseline scenario over the past year without triggering strong deflationary risks, trade-related uncertainty remains elevated.”

Economists have warned that a stronger euro could amplify deflationary pressures stemming from Chinese exports, potentially prompting the ECB to consider further interest rate cuts.

Yu added that ECB staff projections from December suggest a euro-dollar rate of 1.25 would represent a clear overshoot of the expected range and could be sufficient to alter forward guidance.

ECB Executive Board member Isabel Schnabel said on Wednesday that monetary policy is “in a good place,” indicating that interest rates are likely to remain at current levels for an extended period, with markets pricing in no change until early 2027.

Some strategists, however, argue that the traditional relationship between EUR/USD and interest rate differentials has broken down since Trump took office, warning that any ECB rate cuts may be insufficient to move markets increasingly driven by geopolitical and economic risks rather than relative monetary policy.

Japanese policy under scrutiny

Dollar weakness provided modest support to the Japanese yen, which traded at 153.40 per dollar on Thursday, after moving within a 152–154 range for much of the week.

This followed reports that US and Japanese authorities reviewed exchange rates last week, a step often seen as a precursor to potential market intervention.

Goldman Sachs said in a note that coordination between Japan’s Ministry of Finance and the US Treasury could limit short-term downside pressure on the yen, but cautioned that any impact would be temporary unless supported by fundamental factors, such as faster monetary tightening by the Bank of Japan or tighter fiscal discipline.

Meanwhile, the Australian dollar extended its gains on expectations of a possible local interest rate hike as early as next week, touching a three-year high before stabilizing near $0.7038.