Copper prices slipped after Trump’s Section 232 update eased near-term tariff fears, while stronger jobless claims data supported the dollar and reduced expectations for Fed rate cuts.
The copper rally stalled as traders reacted to President Donald Trump’s updated Section 232 tariff guidelines, which did not envision sweeping tariffs on imports of processed critical minerals and their derivative products deemed vital to national security.
What Tariff Update Means For Copper
The proclamation signed by the president on Wednesday called on Commerce Secretary Howard Lutnick and U.S. Trade Representative Jamieson Greer to negotiate agreements with trading partners to establish price floors for critical materials. Following these negotiations, the Commerce Secretary will advise the president on whether further action is necessary.
Trump also stated that he would take additional measures to adjust imports if agreements are not reached within 180 days or if such agreements prove ineffective.
Copper is among the minerals designated as critical by the U.S. government, and the removal of near-term tariff and supply disruption concerns has exerted downward pressure on prices.
Copper Retreats From Record
The benchmark copper futures contract (HG) traded on CME Group’s COMEX surged past $6.10 per pound in early trading on Thursday but subsequently retreated sharply. March-delivery copper futures were last down nearly 2%, trading below $6 per pound.
Copper also lost momentum following the release of a Bureau of Labor Statistics (BLS) report on Thursday showing an unexpected decline in weekly jobless claims for the week ended January 10. Initial unemployment claims fell to 198,000 from a downwardly revised 208,000 the previous week. Economists had expected claims to rise to 215,000, compared with the originally reported 207,000.
Jobs Data Tempers Rate Cut Hopes
The four-week moving average, which smooths weekly volatility, declined by 6,500 to 205,000, the lowest level since January 2024.
Lower jobless claims suggest a relatively healthy labor market, which could reduce the likelihood of near-term interest rate cuts by the Federal Reserve. Higher interest rates tend to support the U.S. dollar, which is typically negative for dollar-denominated commodities such as base and precious metals.
That said, market participants are likely to interpret the latest jobless claims data cautiously due to seasonal distortions around the holiday period. According to the monthly jobs report, the U.S. economy added just 584,000 jobs in 2025, a sharp slowdown from the 2 million jobs added in 2024.
Where’s Copper Headed?
The day’s weakness took the base metal down to a support level of around $5.90 — a level which served as resistance in July last.
Chart courtesy of TradingView
The Volume Weighted Average Price (VWAP) indicates a bearish bias for HG, with prices trading below the session VWAP.
Chart courtesy of TradingView
That said, copper’s fundamental strength remains intact. Copper’s record-setting run has been driven by structural demand growth, underpinned by electrification, artificial intelligence (AI)-driven infrastructure buildout, and tight physical markets. These suggest the rally is not merely speculative, but is well-supported by real-world consumption and longer-term shifts in the global economy.