Global markets are affected by the weakening US Dollar and the shift towards a wartime economy. The rise of AI has added to this change, leading to a greater focus on rare earths and increasing the West’s reliance on Chinese supply chains for essential minerals. There is currently a significant undersupply in copper mining, which might lead to reduced smelting activities and heightened competition for this metal. The US is consuming a large portion of the available copper, lowering global inventory levels and tightening the London Metal Exchange (LME).

Copper Demand and Data Centre Growth

The growing number of data centres is expected to significantly boost copper demand, requiring around an additional 500,000 tonnes by 2027. China’s five-year plan may expand data centre capacity even further, indicating rising future copper needs. The FXStreet Insights Team gathers market information from various experts, combining commercial and analytical notes. Their content highlights market dynamics and economic changes that impact global trading conditions. Their newsletter focuses on in-depth market analysis to keep subscribers informed about current market trends. Additionally, they cover financial topics including currency flows, gold prices, and major economic meetings that influence worldwide markets.

US Dollar and Economic Strategies

The decline of the US Dollar is a key issue we are monitoring. Following significant rate hikes in 2022-2023, the Federal Reserve’s shift to a more flexible approach in 2025 has put ongoing pressure on the dollar. With the US national debt exceeding $37 trillion, many traders favor strategies that benefit from this decline, such as buying puts on the dollar index (DXY) or calls on dollar-denominated assets. The rapid growth of artificial intelligence has heightened global resource competition, changing the economic landscape. The impact of China’s export restrictions on gallium and germanium, initiated in 2023, has led to supply chain instability for semiconductor and defense sectors. This geopolitical tension indicates that options betting on increased volatility in tech ETFs and non-Chinese rare earth producers could be lucrative. Copper’s supply deficit is becoming more serious, largely driven by the AI-led data centre boom. According to the International Energy Agency, data centre electricity demand is set to double by 2026, which is materializing and tightening copper supplies. For traders, this trend supports a positive outlook, making long-term call options on copper futures an appealing position to hold into early 2026. Intense competition for copper is keeping the market extremely tight, as shown by critically low LME inventory levels, which haven’t recovered meaningfully in over two years. The United States remains a major consumer, absorbing available copper and stopping global stocks from increasing. This situation supports strategies like bull call spreads on copper to take advantage of price increases while managing costs. Create your live VT Markets account and start trading now.

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