Copper prices extended their decline, continuing the sharp drop from Friday. The metal market has experienced significant turbulence in recent days, driven by intense battles between bullish and bearish forces in the Chinese market, as traders assess the subsequent trend. On Monday, London Metal Exchange (LME) copper prices continued last week's downward trend, falling 3.92% to $12,653 per tonne at the time of writing, following a 3.4% drop on Friday. Last Thursday, copper prices had surged to a record high above $14,500 per tonne, only to fall below $13,000 during Friday's trading session. Over the past week, the base and precious metals markets have been dominated by intense investor interest, particularly in China, stemming from doubts about the US dollar's outlook and a rotation of funds out of currencies and sovereign bonds. Friday's decline was triggered by US President Trump's nomination of Kevin Warsh, known for his tough stance against inflation, to lead the Federal Reserve. "Some funds are exiting the market before the Spring Festival to avoid risks amid such high volatility," said Gao Yin, an analyst at Shuohe Asset Management. "However, the medium to long-term logic supporting this rally remains unchanged. There is a consensus of bullish sentiment among Chinese investors." January marked the most active month ever for metal trading on the Shanghai Futures Exchange, with copper trading volume surging to a record high during Friday's sell-off. Copper is viewed as an attractive bet due to strong demand prospects and tight supply, but last week's price surge occurred even against a backdrop of stagnating manufacturing activity in China.
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