Copper arrives in July at an inflection point that has been building in the market over the past eighteen months. The US Commerce Department delivered its Section 232 recommendation on a tariff on refined copper to the White House on June 30, and the result is critical. If approved, a tariff of 15% in 2027 and 30% in 2028 will without a doubt cause another round of pre-tariff stockpiling in the second half of this year, and will result in higher prices on COMEX and LME outside the US. The reason for such a forecast is anything but speculation is the global copper market is expected to enter a deficit amounting to about 35,000 tons in 2026 because of the decline in mine production in Indonesia, Chile, DRC, and Zambia, in addition to the sustained end-use demand resulting from electrification, AI data centers, and grid modernis4ation. In just one year, copper has appreciated by more than 36%, and so far this year by 14%. The current price is addressing the question of whether the retracement from its all-time high at $6.72 per pound in May is exhaustion; or the best opportunity to buy it in the entire year.
The price gives convincing reasons to go with the latter. What the price behavior shows us is the strong correction from an extended high that has taken place with price finding its support exactly where it should have 31.8% pullback of the March to May move towards the $6.15 area, while it is consolidating in an area that has shown itself to be solid resistance turned to support. There is no breakdown in the EMA formation yet. The EMA 9 at $5.55 and EMA 20 at $5.66 continue rising and are way below the current price level, maintaining the bullish construction despite any short-term weakness. The MA Cross of the 9 and 21 EMAs comes out at $5.55 and $5.74 respectively. The most straightforward metric on our chart at this point is the RSI. Its value stands at 41.02 ;not quite oversold territory just yet, although getting close and it is trading under its own signal line at 43.87, indicating the presence of selling pressure that has begun to slow down rather than escalate. In the case of a structurally bullish commodity with a real shortage problem, the experience tells us that the patience of long-term investors kicks in when the RSI approaches such values, even before reaching oversold territory.
Trade recommendation
Direction: Long
Entry horizon: $6.10 – $6.25 (current consolidation band, former resistance now support)
Primary target: $6.49
Secondary target: $6.72
Stop loss: $5.76
Technical scenarios
Tariff confirmation breakout: White House confirmation of a phased 15% refined copper tariff for January 2027 triggers US stockpiling and tightens LME supply. Technical indicators turn positive as price clears $6.49 resistance. This targets the $6.72 all-time high, with Goldman Sachs’ $14,000 LME forecast suggesting COMEX prices above $6.35, potentially reaching $7.00 by year-end.
Consolidation and patience: Vague or delayed tariff outcomes result in range-bound trading between $6.10 support and $6.49 resistance. Sideways RSI and compressed MACD reflect a market waiting for clarity. The entry zone remains valid for accumulation while awaiting the catalyst.
Tariff rejection unwind: Outright rejection removes the stockpiling premium, compressing the COMEX-LME spread. RSI dropping below 38 and a break of the $5.76 EMA 200 would target the $5.44 June low. Though unlikely, this high-velocity downside scenario requires a strict stop at $5.76.