Copper and other industrial metals rose due to easing trade tensions, particularly between the US and China. US Treasury Secretary Scott Bessent stated neither country wanted economic decoupling, but questions remain about tariffs and market volatility.

Copper’s recent performance has been marked by volatility, especially since Donald Trump’s presidency began. Gold prices dropped more than 2% amid improving US-China trade relations, though it has risen over 20% this year.

Shanghai Futures Exchange data shows declining inventories for most base metals, with copper stock decreasing by 8,602 tonnes. Aluminium, nickel, and zinc inventories saw reductions, while lead inventories increased by 2,718 tonnes over the past week.

CFTC data indicates speculators increased their COMEX copper net longs, while gold managed money net longs fell, reflecting muted interest despite high prices. Silver net longs also decreased after three weeks of gains.

The article points to a notable rebound in base metals, spurred by a softening of tensions between two of the world’s biggest trading powers. Bessent clarified that intentions to avoid a sweeping economic divide had been expressed, which the markets reacted to rather swiftly. In this context, copper moved higher as anticipated, showing sensitivity not only to policy shifts but also to the tone of government statements. However, while overt confrontation may have been tempered, unresolved issues surrounding tariffs suggest that volatility is unlikely to disappear in the near term.

Gold, conversely, came under pressure, falling more than 2% as investors shifted away from traditional safety assets. Even with a yearly gain exceeding 20%, that recent drop highlights how quickly sentiment can reverse when perceived risk wanes. This pullback offers insight into risk-on/risk-off positioning — particularly relevant when interpreting how global macro trends influence metals markets.

Inventory data from the Shanghai Futures Exchange offers another layer to the pricing dynamics. Over the past week, copper stocks fell by 8,602 tonnes, aligning with higher prices. Given that copper is often seen as a proxy for broader industrial activity, shrinking warehouses can prompt further bullish sentiment. Aluminium, nickel and zinc all saw storage declines as well — favouring longs — while lead diverged, as its inventories increased. The rise in lead stock might moderate enthusiasm in that specific corner of the market, suggesting differential demand profiles across the complex.

Simultaneously, futures positioning from the Commodity Futures Trading Commission provides a read on speculative bias. Net longs in COMEX copper have increased — generally a sign that traders are anticipating higher prices in future sessions. This increment is not isolated; it builds on shrinking inventories and broader optimism about manufacturing recovery. On the other hand, gold’s net longs, managed by money managers, have retreated. There appears to be a reassessment of momentum, even at multi-month highs. For silver, three consecutive weeks of length buildup gave way to a trimmed position — it seems some have opted to lock in gains or reduce exposure ahead of potentially quieter liquidity conditions.

With these shifts in mind, we expect markets to remain reactive to economic updates and supply movements. Price action may become even more sensitive to inventory reports and positioning data, especially if geopolitical developments stall. It’s worth watching for discrepancy between sentiment-driven moves and real physical demand indicators — the latter often reveals itself through exchange warehouse trends and user-level offtake.

We may see further divergence across the metals, depending on each one’s specific use-case. For instance, sectors like renewable energy and EV production continue to impact copper, nickel, and aluminium distinctly. However, short-term trade positioning might still be dictated more by headline risk than structural demand growth. Traders should start weighing this difference more heavily across position sizing and roll strategies. Volatility may spike around diplomatic announcements or unexpected policy adjustments, a reminder that metals do not trade on fundamentals alone.