Copper Nears Record Highs as Supply Constraints Support Metals

Tashkent, Uzbekistan (UzDaily.uz) — The metals market resumed its upward trend in early August, supported by improved investor sentiment and continuing supply shortages in the industrial metals market, according to an analysis by Alpari analyst Anna Bodrova.

She said reports of a possible agreement between the United States and Iran on reopening the Strait of Hormuz helped improve market sentiment by easing concerns over accelerating inflation. At the same time, industrial metals continue to be supported primarily by constrained supply, while the outlook for precious metals largely depends on future signals from the U.S. Federal Reserve.

Gold is holding near US$4,100 per ounce, while silver is trading above US$59.5 per ounce. Both metals have risen for a second consecutive day after expectations of further Federal Reserve monetary tightening weakened amid falling oil prices.

At the same time, U.S. central bank officials continue to signal their readiness to raise interest rates if inflationary pressures intensify. Market participants are now awaiting new U.S. employment data, which could influence future expectations.

According to the analyst, platinum remains one of the strongest-performing precious metals. It is trading above US$1,700 per ounce, close to a seven-week high. The metal continues to benefit from improving market sentiment and limited supply.

Additional support came from a forecast by Valterra Platinum, the world's largest platinum producer, which expects demand to continue growing due to the expansion of infrastructure supporting artificial intelligence technologies.

Copper remains the leading performer among industrial metals. Its price has climbed above US$6.6 per pound again, approaching record highs.

The analyst attributed the increase primarily to declining global copper inventories. Ahead of an expected decision by U.S. authorities on possible import tariffs, suppliers have increased shipments to the U.S. market.

More than 200,000 tonnes of copper were delivered to the United States in July, the highest monthly volume in more than a decade. At the same time, inventories at London Metal Exchange warehouses fell to their lowest level in five months, while part of the metal was redirected to China to cover local supply shortages.

Aluminium also extended its gains. Its price rose above US$3,210 per tonne, reaching its highest level in nearly one and a half months.

Bodrova said the market continues to be supported by lower production outside China, record-low inventories at London Metal Exchange warehouses, production constraints in China, and revised output forecasts by major producers.

According to the Alpari analyst, the metals market is gradually shifting its focus from geopolitical factors to underlying supply and demand fundamentals.

While easing inflation expectations continue to support precious metals, industrial metals remain the main driver of the market, backed by limited inventories, structural supply shortages, and resilient demand from the energy sector, infrastructure projects and artificial intelligence technologies.