Nickel prices fell on Tuesday as a major U.S. bank issued a downbeat forecast for industrial metals next year.

In a research note published Friday, Goldman Sachs said copper prices are expected to remain within a range of $10,000 to $11,000 per metric ton during 2026–2027 due to a supply surplus, though the long-term outlook for industrial metals remains positive.

The bank highlighted three key factors likely to cap copper’s upside:

Chinese buyers may reduce purchases if prices exceed $11,000 per ton, as seen in Q2 2024; high U.S. inventories could quickly rebalance the market if price spreads on the London Metal Exchange (LME) narrow; and demand linked to data centers may have been overestimated compared to initial projections.

Copper prices dropped Friday after U.S. President Donald Trump said Washington was considering a major increase in tariffs on Chinese imports, raising fears of an escalating trade war between the world’s two largest economies.

Goldman: Indonesian producer margins to determine nickel’s path

Regarding the nickel market, Goldman Sachs said profit margins for Indonesian producers need to decline further to slow supply growth and reverse the persistent surplus.

The bank expects nickel prices to fall 6% to $14,500 per metric ton by December 2026.

Aluminum market seen in surplus, prices unlikely to recover before 2030

Goldman also forecasts a surplus in the aluminum market as Indonesian supply rises from mid-2026.

It projects aluminum prices at around $2,350 per ton in Q4 2026, with no return to current levels before 2030.

China to become net zinc exporter by 2026

The bank expects China to shift from a net importer to a net exporter of zinc in 2026, driven by increased domestic production.

“We expect China’s rising output to move the country from deficit to surplus, while the market outside China turns to deficit,” the report said. “To achieve global balance, Chinese producers will need to be incentivized to export.”

Cobalt supported by supply tightness and new export quotas from Congo

In the cobalt market, Goldman Sachs noted that new export quotas imposed by the Democratic Republic of Congo — which accounts for 70% of global supply — are likely to trigger a deficit in 2026, tightening the market and supporting prices.

Lithium to stay depressed until 2026 amid persistent oversupply

Goldman also expects lithium prices to remain subdued for longer, averaging $8,900 per metric ton in 2026, citing ongoing oversupply keeping the market bloated.

As of 16:07 GMT, spot nickel prices were down 0.7% at $14,900 per ton.

Bitcoin Falls as Trade Tensions Weigh on Risk Appetite

Bitcoin retreated on Tuesday, ending its recent rebound as risk appetite faded across markets amid escalating fears of a renewed trade war between the United States and China.

The broader cryptocurrency market traded lower or flat after suffering steep losses in recent sessions.

U.S. President Donald Trump’s announcement of 100% tariffs on China wiped nearly $500 billion off the total crypto market capitalization in just a few days.

Bitcoin led the decline, plunging sharply from last week’s record high of $126,000.

As of 00:53 Eastern Time (04:53 GMT), the world’s largest cryptocurrency was down 1% at $113,547.

Investors shifted away from Bitcoin toward traditional safe-haven assets such as gold, which hit a new all-time high on Tuesday.

Although more conciliatory U.S. statements toward China offered brief support to digital assets, overall risk sentiment remained fragile.

Bitcoin’s Rebound Short-Lived Amid Market Turmoil

Bitcoin had fallen sharply to $103,800 over the weekend following Trump’s initial announcement of new tariffs on China.

While the token later recovered to $115,000 on Monday, the rebound quickly lost steam as signs of improvement in U.S.–China relations remained absent.

China said on Tuesday it was “ready to fight to the end” in a trade war with the United States, accusing Washington of discriminatory policies.

The latest flare-up in trade tensions — threatening to unravel the previous framework agreement between the two sides — stems from U.S. anger over China’s tightened restrictions on rare-earth exports.

Beijing defended the curbs as justified and signaled little willingness to comply with U.S. demands, though it confirmed that technical talks with Washington were ongoing while warning against further tariff escalation.

Oil prices fell on Tuesday after giving up early gains, amid renewed concerns over trade tensions between the United States and China — the world’s two largest economies — and warnings from the International Energy Agency (IEA) about weakening fundamentals in the market.

Brent futures dropped $1.72, or 2.7%, to $61.60 per barrel, while US West Texas Intermediate (WTI) fell 2.9%, or $1.72, to $57.78 — bringing both benchmarks close to five-month lows.

On Monday, Brent had closed up 0.9%, and WTI ended the session with a 1% gain.

Tamas Varga, analyst at PVM Oil Associates, said: “We are still assessing the implications of the peace process in the Middle East, ongoing attacks on oil infrastructure in Ukraine and Russia, and the possibility of a renewed trade war between the world’s economic giants.”

US Treasury Secretary Scott Bessent said Monday that President Trump remains committed to meeting Chinese President Xi Jinping in South Korea this month, as the two nations seek to calm tensions over tariffs and export restrictions.

However, last week’s developments — including Beijing expanding restrictions on rare-earth exports and Trump’s threat of 100% tariffs and software export curbs beginning November 1 — weighed heavily on market sentiment.

In the latest escalation, China announced on Tuesday sanctions on five companies linked to South Korean shipbuilder Hanwha Ocean (which has US ties), while US and Chinese authorities began imposing additional surcharges on shipping firms that transport everything from holiday toys to crude oil.

IEA Warns of Weak Demand Amid Rising Supply

In its monthly report on Tuesday, the International Energy Agency raised its forecast for global oil supply growth this year — following OPEC+’s decision to raise output — but downgraded its demand growth outlook, citing deteriorating global economic conditions.

OPEC and its partners, including Russia, said in their own monthly report on Monday that the supply deficit in the oil market will shrink in 2026 as OPEC+ proceeds with planned production increases.

Market Indicators Reflect Supply Abundance

Market data shows that the six-month futures spread for Brent has narrowed to its smallest premium since early May, while the WTI spread reached its lowest level since January 2024.

This flattening of “backwardation” — where spot prices exceed futures — suggests traders expect smaller profits from selling into the spot market, reflecting increased near-term supply and reduced scarcity concerns.

The U.S. dollar’s sharp rally over the past month is unlikely to last, as analysts view it as driven largely by temporary factors — notably the suspension of U.S. economic data releases due to the federal government shutdown and political turmoil in rival economies.

The greenback has risen about 3% against a basket of major currencies since mid-September, recovering part of its 11% loss earlier this year and moving away from its lowest level in more than three years.

Data from the U.S. Commodity Futures Trading Commission (CFTC) — before publication was halted by the shutdown — showed that net short bets against the dollar fell to $9.86 billion from a peak of $20.96 billion during the same period.

Options markets also reflected this shift in sentiment, with one-month and three-month euro-dollar contracts hitting their lowest levels in favor of the euro since mid-June.

Still, most analysts doubt the sustainability of the dollar’s rebound.

Mark Chandler, Chief Market Strategist at Bannockburn Global Forex, said: “Over the three- to six-month horizon, I expect the dollar to weaken because the U.S. economy will slow and interest rates will decline.”

Analysts say much of the dollar’s recent strength stems from investors covering short positions rather than building new long exposure.

Jayati Bhardwaj, FX strategist at TD Securities, said: “What we’re seeing in the markets is simply position adjustment.”

Joel Kruger, market strategist at LMAX Group in London, noted that the dollar’s rally has probably lost momentum despite its strength in recent weeks. “There’s near-term downside risk for the dollar,” he added.

As of 11:53 GMT, the U.S. Dollar Index was up 0.1% at 99.4 points, after trading between 99.07 and 99.4.

International Developments Offer Temporary Support

The dollar’s weakness earlier this year stemmed from fading “U.S. exceptionalism,” fears that President Donald Trump’s protectionist trade policies would hurt growth, and concerns over America’s widening fiscal and trade deficits.

But with U.S. data releases suspended and new political crises emerging abroad — notably in Japan and France — investors have shifted their focus away from the dollar’s own vulnerabilities.

The euro fell about 1.3% in October, ending a two-month winning streak, while the yen weakened roughly 3% against the rising dollar.

Political instability in France — the eurozone’s second-largest economy — weighed on the euro, while leadership changes in Japan clouded expectations for the Bank of Japan’s monetary stance, pressuring the yen further.

Even so, analysts argue that investors’ reactions have been exaggerated.

Morgan Stanley strategists wrote on Friday: “The surprise result of Japan’s Liberal Democratic Party leadership election triggered an outsized yen sell-off as investors bet on fiscal expansion and looser monetary policy. We see this as an overextended positioning move.”

A Counter-Trend Rally

A Reuters poll in early October showed most FX strategists expect the dollar to weaken against all major currencies over the next three, six, and twelve months, citing the growing U.S. fiscal deficit and concerns about Federal Reserve independence.

Colin Graham, Head of Multi-Asset Strategies at Robeco in London, said: “The dollar will decline over time, but there are always counter-trend rebounds within a broader downtrend. We’re positioned short the dollar but managing our exposure dynamically.”

Could the End of the Government Shutdown Spark Another Move?

Analysts say the dollar could extend its rally if U.S. growth data surprises to the upside and the Fed refrains from cutting rates as expected.

For now, however, the same bearish fundamentals that pushed the dollar lower earlier this year remain — including concerns over slowing growth and monetary-policy uncertainty — though recent political events have overshadowed them temporarily.

Morgan Stanley strategists added that once U.S. data releases resume after the government reopens, they could serve as a catalyst for a yen rebound, advising investors to stay short on the dollar versus the yen.

With Fed Chair Jerome Powell entering the final months of his term — and amid ongoing White House efforts to remove Fed Governor Lisa Cook — analysts say concerns about Fed independence and confidence in the dollar will grow more prominent.

BofA Global Research wrote in a Friday note: “Investors remain uneasy about the Fed’s independence and its implications for the dollar, though their focus has temporarily shifted elsewhere.”

At the same time, the Fed’s expected resumption of its rate-cutting cycle will lower hedging costs for foreign investors, adding further pressure on the greenback.

Chandler of Bannockburn Forex concluded: “I believe the dollar’s major bull cycle has ended — we’re now in its downward phase.”