Copper edged slightly higher on Thursday as sentiment around the AI trade improved. The metal returned to the upside after falling to a multi-week low yesterday amid a multi-session correction. 

While the market stayed on an uptrend overall, it could remain under pressure amid expectations that major central banks could tighten monetary policy, according to Tony Sage, CEO of Critical Metals. 

At its latest meeting, the Federal Reserve kept interest rates unchanged while signaling growing support for a potential tightening if inflation remains persistent. 

Fed Chair Kevin Warsh reiterated the central bank’s commitment to restoring price stability, a message echoed by other major central banks. The Federal Reserve is expected to hike interest rates twice in the next 12 months, which could weigh on copper.

Market attention is now turning to the upcoming US Department of Commerce report under the Section 232 national security review. Any subsequent new tariff decision may affect copper prices and fuel heightened volatility. Additional tariffs could sustain prices, while a delay or rejection of any new tariffs could weigh on the market, stated Sage.

Meanwhile, copper could continue to see favourable conditions over the long term with demand supported by power grid investments, electrification, data center expansions, and artificial intelligence infrastructure, creating a bullish long-term scenario, in addition to a tight supply outlook, he added.-TradeArabia News Service