Copper had a historically bad day as the tariff landscape evolves

Copper prices have had quite a busy few weeks. In fact, we most recently wrote about copper putting in quite a historic green day as President Trump first mentioned the metal could be exempt from possible tariff implementation. Most recently, Copper cratered to pre-summer levels after it was announced that raw “input” materials (unrefined copper) would be exempt from tariffs, while other goods (copper wiring, pipes, etc.) wouldn’t be as lucky. On the news, HG/ slipped over 20%... its worst day ever dating back to mid-1989. As you may expect, this coincided with the metal moving back into a negative trend on its default PnF chart.

Wednesday’s featured article talked about a lack of defined leadership within a weakening commodity group. Gold and crude oil were the focus of that article, lacking commentary on industrial metals which have struggled to earn prolonged group-wide relative strength against other parts of the asset class. The historic decline for Copper does little to help that case as we open August, with representative CPER showing relative weakness against domestic benchmark SPXEWI. The fund returned to a sell signal on its respective 3.25% RS chart, its first since November of last year.

Another important relationship is between Copper and Gold. In the last copper focused article, we highlighted the fact that despite the overall risk-on market environment so far in 2025, GLD has maintained a string of buy signals against CPER due to its intense strength over the last few years. With this week’s move, CPER posted its third consecutive sell signal against GLD on its 3.25% RS chart, matching relative lows dating back to March of 2020. That was, of course, the start of an intense rally as the world re-opened from the pandemic… a catalyst not present in the current situation. Regardless, following RS signals for this relationship has been quite additive since the early 90’s, and the continued relative dominance from gold is quite notable despite its recent consolidation.

For those of you with exposure to copper, continue to exercise caution. In a similar fashion to our advance after a historic up day for HG/ post tariff announcement, normalization could be in store as many names find themselves in oversold territory. The move lower also confirms recent commentary that commodities are a group lacking defined price leadership. Also know that the space will undoubtedly be a group driven in the near-term by headlines, making it easy to get caught up in a tariff guessing game…