Copper prices held near their all-time highs reached in the previous session, as strong US economic growth bolstered demand prospects for the metal, while supply constraints continued to support prices.

The most actively traded copper contract on the Shanghai Futures Exchange rose 1.5% to 95,100 yuan ($13,532.0) per metric ton by 03:02 GMT, after touching a record high of 95,550 yuan earlier in the session.

Meanwhile, the benchmark three-month copper contract on the London Metal Exchange edged up 0.1% to $12,076.5 per ton.

The contract had reached a record high of $12,159.50 on Tuesday and is on track to post an annual gain of around 38%, driven by a weaker US dollar, bets on further interest rate cuts by the Federal Reserve, rising demand linked to artificial intelligence and the energy transition, as well as mine supply disruptions that have fuelled speculative investment in the metal.

The US economy grew at its fastest pace in two years during the third quarter, supported by strong consumer spending and a robust rebound in exports.

On the supply side elsewhere, a Chinese market information provider reported last month that China’s largest copper smelters plan to cut output by more than 10% in 2026, in an effort to address excess smelting capacity that has led to growing distortions in copper concentrate treatment charges.

Strength across the broader metals market further supported prices, as the US dollar is set to record its worst annual performance in more than two decades on Wednesday, with investors betting that the Federal Reserve will have room to deliver additional rate cuts next year, while some of its global peers are expected to raise interest rates.

Among other base metals traded on the Shanghai Futures Exchange, nickel extended its rally for a sixth consecutive session, jumping 4% to 126,680 yuan per ton, the highest level in around nine months.

Benchmark nickel prices on the London Metal Exchange also rose 1% to $15,970 per ton, marking a seven-month high.

In Shanghai, aluminium gained 0.5%, zinc rose 0.8%, and lead advanced 1.3%, while tin slipped 1.2%.

On the London Metal Exchange, aluminium climbed 0.3%, zinc increased 0.8%, and lead added 0.6%, while tin fell 0.2%.

Oil prices edged higher for a sixth consecutive session on Wednesday, supported by strong economic growth in the United States and risks of supply disruptions from Venezuela and Russia, even as prices are on track for their steepest annual decline since 2020.

Brent crude futures rose 16 cents, or 0.3%, to $62.54 a barrel by 12:22 GMT, while US West Texas Intermediate crude gained 23 cents, or 0.4%, to $58.61 a barrel.

Both contracts have advanced about 6% since December 16, when they fell to levels near five-year lows.

Tony Sycamore, market analyst at IG, said the past week reflected “a combination of position squaring in thinly traded markets after last week’s sell-off failed to gain traction, alongside rising geopolitical tensions, including the US blockade on Venezuela, as well as support from the strong GDP data released overnight.”

US data showed that the world’s largest economy grew at its fastest pace in two years during the third quarter, driven by resilient consumer spending and a sharp increase in exports.

Despite the recent rebound, both Brent and WTI are set to post annual declines of around 16% and 18%, respectively — their biggest drops since 2020, when the COVID-19 pandemic crushed global oil demand — amid expectations that supply will outstrip demand.

On the supply front, disruptions to Venezuelan exports have been a key factor lifting prices, while ongoing reciprocal attacks by Russia and Ukraine on energy infrastructure have also supported the market, according to a report from Haitong Futures.

More than a dozen oil tankers loaded with crude are currently waiting for new instructions in Venezuela after the United States seized the supertanker “Skipper” earlier this month and targeted two additional vessels over the weekend.

US President Donald Trump said last week that Washington had imposed a “blockade” on all sanctioned ships entering or leaving Venezuela, stepping up pressure on Venezuelan President Nicolás Maduro.

Meanwhile, data showed US crude inventories rose by 2.39 million barrels last week, while gasoline stocks increased by about 1.09 million barrels and distillate inventories climbed by 685,000 barrels, according to market sources citing figures from the American Petroleum Institute released on Tuesday.

Official inventory data from the US Energy Information Administration are scheduled for release on Monday, later than usual due to the Christmas holiday.

The US dollar fell on Wednesday and was on track to record its largest annual loss since 2017, with scope for further declines, as investors bet that the Federal Reserve will have room to cut interest rates more aggressively next year, while most other major central banks are seen as having largely завершed their easing cycles.

Strong US gross domestic product data released on Tuesday failed to alter interest-rate expectations, with investors continuing to price in around two additional rate cuts by the Federal Reserve in 2026.

David Mericle, chief US economist at Goldman Sachs, said: “We expect the Federal Open Market Committee to converge on two additional 25-basis-point cuts, bringing rates to a 3%–3.25% range, but we see risks skewed toward even more easing,” citing slowing inflation.

Both the euro and the British pound edged up to three-month highs on Wednesday before settling later near $1.180 for the euro and $1.3522 for sterling.

Against a basket of currencies, the dollar index slipped to a two-and-a-half-month low of 97.767 points. The index is on course to post an annual loss of 9.8%, its steepest yearly decline since 2017. Any further weakness in the final week of the year could push it toward its biggest annual drop since 2003.

The dollar has endured a turbulent year, heavily affected by the chaotic tariffs imposed by US President Donald Trump, which earlier in the year triggered a confidence shock toward US assets. His growing influence over the Federal Reserve also raised concerns about the central bank’s independence.

In contrast, the euro has risen more than 14% since the start of the year, putting it on track for its strongest annual performance since 2003.

The European Central Bank kept interest rates unchanged last week and raised some of its growth and inflation forecasts, a move widely seen as closing the door to further near-term monetary easing.

Market participants responded by pricing in a slim chance of policy tightening next year, a view mirrored in Australia and New Zealand, where the next move is increasingly seen as a rate hike.

That outlook supported both the Australian and New Zealand dollars. The Australian dollar has risen 8.4% year-to-date and touched a three-month high of $0.6710 on Wednesday, while the New Zealand dollar reached a two-and-a-half-month high of $0.58475.

Sterling has gained more than 8% this year. Investors are betting that the Bank of England will deliver at least one rate cut in the first half of 2026, with markets pricing roughly a 50% chance of a second cut before year-end.

Even so, most currencies have lost significant ground relative to precious metals, led by gold, which hit a fresh record high on Wednesday.

Some smaller European currencies, often associated with low debt levels, were among the best performers this year.

The dollar has fallen 12% against the Norwegian krone, 13% versus the Swiss franc — trading at 0.7865 francs — and 17% against the Swedish krona, hitting its lowest level since early 2022 at 9.167 kronor on Wednesday.

Traders watch for possible Japanese intervention to support the yen

The Japanese yen remains the central focus in foreign exchange markets, with traders on alert for possible intervention by Japanese authorities to halt the currency’s decline.

Japanese Finance Minister Satsuki Katayama said on Tuesday that Japan has full freedom to respond to excessive moves in the yen, issuing the strongest warning yet of Tokyo’s readiness to intervene in markets.

Her comments helped halt the yen’s slide, with the dollar falling 0.3% against the Japanese currency to 155.83 yen on Wednesday, after a 0.5% drop in the previous session.

Although the Bank of Japan finally delivered a long-anticipated rate hike last Friday, the move was largely expected, and comments from Governor Kazuo Ueda disappointed some traders who had hoped for a more hawkish tone, leaving the yen under pressure after the decision.

As a result, investors remain on guard for potential yen-buying intervention by Japanese authorities, especially as trading volumes thin toward year-end — a backdrop that analysts say could offer a favorable window for official action.

Gold prices rose in European trading on Wednesday, extending gains for a fourth consecutive session and continuing to shatter record highs, after breaking above the $4,500-per-ounce level for the first time in history. The move was driven by strong investment demand for the precious metal, supported by continued declines in the US dollar in the foreign exchange market.

These developments come amid rising expectations that the Federal Reserve will cut US interest rates twice next year. To reprice those expectations, investors are later today awaiting US third-quarter economic growth data.

Price overview

• Gold prices today: Gold rose about 0.95% to $4,525.96 per ounce, an all-time high, from an opening level of $4,484.25, after touching a low of $4,467.84.

• At settlement on Tuesday, gold prices gained 0.9%, marking a third consecutive daily increase.

The US dollar

The US dollar index fell 0.1% on Wednesday, extending its losses for a third straight session and hitting a two-and-a-half-month low, reflecting continued weakness in the US currency against a basket of major and secondary currencies.

As is well known, a weaker US dollar makes dollar-priced gold bullion more attractive to buyers holding other currencies.

These losses come amid active selling of the dollar ahead of the Christmas and New Year holidays, and under pressure from cautious comments by some Federal Reserve officials, which highlighted growing concerns about weakness in the US labor market.

Eric Bregar, head of FX and precious metals risk management at Silver Gold Bull in Toronto, said the US dollar could decline next year, at least in the first quarter, as the Federal Reserve will increasingly be forced to acknowledge that the labor market is not in good shape.

Bregar added that the Fed may be compelled to make greater concessions on interest rate cuts, and at a faster pace than it has so far, noting that markets want rate cuts and that expectations are building for a new, more dovish Federal Reserve chair who would seek to deliver that outcome.

US interest rates

• According to the CME FedWatch tool, pricing for keeping US interest rates unchanged at the January 2026 meeting stands at 87%, while the probability of a 25-basis-point rate cut is priced at 13%.

• Investors are currently pricing two US rate cuts over the course of next year, while the Federal Reserve’s own projections point to just one 25-basis-point cut.

• To reprice these expectations, investors are closely monitoring further US economic data releases, along with comments from Federal Reserve officials.

Gold outlook

Analysts at Mitsubishi said that with precious metals hitting record prices at this late point in the year — a time when one would usually be writing a Christmas card or two — the key takeaway may be that investors have not treated the holiday period as an opportunity to take profits.

Zain Vawda, market analyst at OANDA’s MarketPulse, said that bets on interest rate cuts have increased following the latest US inflation and labor market data, which is supporting demand for precious metals.

Vawda added that demand for safe-haven assets is also expected to remain strong amid tensions in the Middle East, uncertainty over reaching a peace agreement between Russia and Ukraine, and recent US actions against Venezuelan oil tankers.

SPDR fund

Gold holdings at the SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, were unchanged on Tuesday, leaving total holdings steady at 1,054.56 metric tons, the highest level since June 23, 2022.