Nickel prices jumped by more than 10% on the London Metal Exchange during Tuesday’s session, recording their biggest gain in more than three years, as rising investor interest in China fueled a broad rally across metals markets.

The battery and stainless-steel metal climbed to $18,785 per metric ton on the London Metal Exchange, extending a strong upward trend that has lifted prices by around 30% since mid-December.

Despite a substantial oversupply in the nickel market, growing risks to production in Indonesia, the world’s largest supplier, helped improve sentiment, alongside broad-based investment inflows into China’s domestic metals markets.

This shift marks a sharp reversal for a metal that had long struggled under the weight of Indonesian overproduction and weaker-than-expected demand from electric vehicle batteries. It also signals a revival in LME nickel trading after volumes fell sharply following the historic short squeeze crisis that hit the market in 2022.

Trading dynamics show that Chinese investors played a pivotal role in pushing metals prices higher this week, including nickel, copper, and tin. Prices on the London exchange surged during high-volume Asian trading hours, before extending gains during the Shanghai Futures Exchange’s overnight session.

Base metals have started 2026 on strong footing, with the LMEX index, which tracks six major metals, rising to its highest level since March 2022, when the sector last peaked. Copper has gained more than 20% since late November, while aluminum has climbed to its highest level since April 2022.

Copper extended its rally this week after breaking above $13,000 per ton for the first time, as investors bet on tightening supply and improving risk appetite across broader financial markets. Three-month copper contracts on the London Metal Exchange rose as much as 3.1% on Tuesday to hit a fresh record of $13,387.50 per ton, surpassing the previous day’s high.

Although demand has slowed in recent months, particularly in China, the world’s largest consumer, buyers there are now engaged in fierce competition to secure supplies as copper continues to flow into the United States. Expectations that the administration of US President Donald Trump could impose tariffs on refined copper have prompted large stock withdrawals into the US market, potentially leaving the rest of the world facing tighter supply at a time when producers are struggling to raise output.

President Trump had previously boosted copper shipments to the United States during the first half of last year, before exempting refined copper from tariffs, which temporarily halted these flows. However, trade has picked up again in recent months as tariff policies have been reconsidered, pushing US domestic prices back into premium territory. US copper imports rose in December to their highest level since July.

By the close of trading on Tuesday, copper prices on the London Metal Exchange rose 1.9% to settle at $13,238 per ton by 5:57 pm London time.

Nickel closed up 9% at $18,524 per ton, while tin ended the session with a gain of 4.9%.

Bitcoin fell on Wednesday after a short-lived recovery in the previous session, as rising geopolitical uncertainty and caution ahead of key US economic data weakened investor appetite for risk-dependent markets.

Cryptocurrency markets drew only limited support from MSCI’s decision not to proceed with a proposal to exclude companies holding digital assets on their balance sheets from its indexes.

Shares of Strategy Inc, listed on the Nasdaq under the symbol MSTR and the world’s largest corporate holder of bitcoin, rose on Tuesday following the MSCI announcement. However, equity gains failed to spill over into the cryptocurrency market, which remained range-bound after a modestly positive start to the new year.

Bitcoin fell 1.1% to $92,543.7 by 00:58 Eastern Time (05:58 GMT).

Risk appetite remained weak amid escalating geopolitical tensions worldwide, including a deepening diplomatic rift between China and Japan, while markets also awaited greater clarity on US plans regarding Venezuela.

Caution was further reinforced by anticipation of major US economic data due later this week.

MSCI drops plan to exclude digital-asset treasuries, Strategy shares rise

MSCI said on Tuesday it would not move forward with a proposal to exclude companies with digital-asset treasuries, such as Strategy, from its indexes.

The index provider said it would instead launch a broader review of how to treat non-operating companies, defined as firms without clear sources of operating revenue, within its indexes.

The decision means Strategy will remain included in MSCI’s global indexes for now. The company’s shares rose 6% in after-hours trading on Tuesday.

However, Strategy stock had fallen 4.1% during the regular session after the company disclosed massive unrealized losses of $17.44 billion on its digital-asset holdings in the fourth quarter of 2025.

Strategy’s share price has also declined by about half over 2025, reflecting a prolonged downturn in bitcoin prices and growing investor questions over the long-term viability of the company’s debt-funded bitcoin accumulation strategy.

Cryptocurrency prices today: limited moves in altcoins amid geopolitical and economic risks

Cryptocurrency prices were broadly flat to lower on Wednesday as risk appetite remained subdued.

US President Donald Trump said Venezuela would supply the United States with between 30 million and 50 million barrels of oil, a development that added to volatility in crude markets. Global markets had already been unsettled earlier this week following the US arrest of Venezuelan President Nicolas Maduro.

Markets also remained cautious ahead of key US economic data releases this week, with particular focus on the non-farm payrolls report due on Friday.

While cryptocurrencies showed some early-year strength, the market has slipped back into a quiet trading range this week in the absence of clear positive catalysts.

Ethereum, the world’s second-largest cryptocurrency, rose 0.4% to $3,252.96, while XRP fell about 5%, giving up part of the gains it recorded on Tuesday.

Oil prices fell on Wednesday after US President Donald Trump announced that the United States had reached an agreement to import up to $2 billion worth of Venezuelan crude oil, a move expected to increase supplies for the world’s largest oil consumer.

Brent crude futures slipped 11 cents to $60.59 a barrel by 11:04 GMT, while US West Texas Intermediate crude futures fell 27 cents to $56.86 a barrel.

Both benchmarks extended losses of more than $1 from the previous trading session, as market participants continued to expect ample global supplies during the year.

Two sources familiar with the matter told Reuters that the deal between Washington and Caracas could initially require rerouting cargoes that had been destined for China. Venezuela holds millions of barrels of oil loaded on tankers and in storage tanks, but has been unable to ship them since mid-December due to the blockade imposed by Trump on Venezuelan oil exports.

That blockade was part of a US pressure campaign against the government of Venezuelan President Nicolas Maduro, which culminated in his arrest by US forces over the weekend. Senior Venezuelan officials described Maduro’s arrest as a “kidnapping operation” and accused the United States of attempting to seize the country’s vast oil reserves.

In a social media post on Tuesday, Trump said Venezuela would “deliver” between 30 million and 50 million barrels of “sanctioned oil” to the United States.

Giovanni Staunovo, an analyst at UBS, said: “Trump’s post about Venezuelan oil imports put downward pressure on crude prices earlier today, but market participants now appear to believe the volumes could be smaller, which helped prices pare earlier losses.”

Morgan Stanley analysts estimate that the oil market could see a surplus of up to 3 million barrels per day in the first half of 2026, citing weak demand growth last year and rising supplies from OPEC producers and non-OPEC countries.

However, analysts at BMI, a unit of Fitch Solutions, said in a note on Wednesday that the prospect of increased exports of low-cost Venezuelan oil could slow the expansion of production capacity in the United States and other regions.

Venezuela sells its main Merey crude grade at a discount of around $22 a barrel to Brent prices, for delivery at its ports.

“This raises medium-term oil price expectations, particularly if the Venezuelan regime remains in place,” BMI analysts said.

The dollar moved within narrow ranges on Wednesday, ahead of a series of US economic data releases that could shape Federal Reserve interest rate expectations, a factor traders view as more influential for currency markets than ongoing geopolitical tensions.

Markets largely ignored the deepening geopolitical divisions around the world, as equities continued to rise, while currencies and bonds showed little reaction following the US intervention in Venezuela and the arrest of President Nicolas Maduro.

Markets entered a wait-and-see mode ahead of a batch of US labor market data, including private-sector employment figures and job openings, due later in the day, ahead of the closely watched nonfarm payrolls report on Friday.

Ahead of the data, the dollar index edged slightly higher to 98.63 points.

Thierry Wizman, global foreign exchange and interest rate strategist at Macquarie Group, said:

“Traders seem comfortable with the rhetoric coming out of the United States as long as it does not imply the need for a direct military presence on the ground to govern Venezuela.”

He added: “A military invasion and a prolonged ground conflict could have triggered a sharp sell-off in the dollar, as seen during the Iraq and Afghanistan wars between 2002 and 2008.”

Investors are struggling to form a clear picture of the performance of the world’s largest economy following a record US government shutdown last year, which disrupted the collection and publication of key economic data.

Even so, investors remain convinced that the Federal Reserve will cut interest rates twice more during the current year. This expectation has weighed on the dollar, while growing divisions within the Fed and the approaching announcement by US President Donald Trump of his next nominee to chair the central bank have further complicated the outlook for US monetary policy.

The euro slipped slightly after declining the previous day, following a sharper-than-expected slowdown in German inflation in December, prompting traders to modestly scale back bets on an interest rate hike in early 2027.

Markets have priced in unchanged interest rates until 2026 since last summer, with expectations for policy tightening by the European Central Bank in 2027 as inflationary pressures rise due to German fiscal stimulus.

The single currency fell 0.10% to $1.1676, after dropping 0.28% on Tuesday.

In another development being monitored by traders, China on Tuesday banned exports of dual-use materials to Japan that could be used for military purposes, in the latest move by Beijing in response to remarks made by Japanese Prime Minister Sanae Takaichi in early November regarding Taiwan. Strategists said the move had little impact on foreign exchange markets.

The US dollar slipped 0.10% against the Japanese yen to 156.51.

The Australian dollar reached its highest level since October 2024 at $0.6766, after a mixed inflation report kept hopes of a near-term interest rate hike in check. The New Zealand dollar traded at $0.5783.

Jose Torres, chief economist at Interactive Brokers, commented on Wednesday’s data by saying: “The ADP monthly employment report will be the most influential, as a rise in the unemployment rate represents one of the key risks in the new year, alongside the possibility that massive investments in artificial intelligence fail to deliver outsized returns.”