Copper prices surge 11% after tariff threat, is silver next?
2025-07-09 15:14:43
Comex copper futures surged to a new intraday high of $5.896 a pound, up 11% on the day.
Bart Melek, head of commodity strategy at TD Securities, said the price action was a liquidity event similar to what drove gold higher at the beginning of the year.
He explained that Trump's proposed tariffs have created a huge premium for U.S. copper. The London Metal Exchange (LME) copper price is currently $9,870 per ton. Melek said that after adjusting for exchange rates, U.S. copper futures are about $2,000 premium to London copper futures.

“It’s a pretty attractive spread, so we’re going to see as much inventory as possible flow into U.S. warehouses, which will put pressure on global supply,” he said.
Michele Schneider, chief market strategist at MarketGauge, said she agreed that copper prices had strong potential as U.S. tariffs will impact “already uncertain supply.”
At the same time, Schneider noted that copper demand is increasing, driven by the artificial intelligence revolution and the need for new data centers, which is prompting renewed investment to upgrade the nation's energy infrastructure.
While copper prices have surged, some analysts say there is another metal that investors should also keep an eye on.
Phillip Streible pointed out that rising copper prices could significantly boost silver prices. The silver market has already come off Tuesday's low of $36.30 an ounce. He said: "Copper rose first, and then silver." Silver is currently outperforming gold.
Melek doubts silver will benefit from higher copper prices, calling it a market-specific liquidity event. However, he added that silver could regain investor interest as a value investment.
Schneider said she remains very bullish on silver, and stressed that demand driving up copper is also a key factor for silver. “Silver is an industrial metal and it’s also in short supply,” she said.
While investors are enjoying the sky-high breakout in copper prices, Melek warned that risks remain. It will be difficult for the U.S. to maintain these tariffs because they could hurt the competitiveness of the U.S. manufacturing sector, he said.
“This will increase input costs and make American products more expensive,” he said.
Currently, domestic production in the United States only accounts for about 64% of domestic demand. In order to meet domestic consumption, the United States needs to import up to 700,000 tons of copper.
Melek added that despite the risks, copper prices are unlikely to see a sharp correction as U.S. demand accounts for only 8% of global supply. He also pointed out that if the LME wants to increase copper inventories, it needs to narrow the premium gap with the United States, which means that price increases may continue to intensify price increases.
“Since Trump’s Liberation Day, the U.S.-London premium has averaged $924 per tonne, about $850 above the average of the past two years,” Melek said in a note. “Year to date, the Comex front-month copper contract has risen around 25%, while the LME price has risen 13%.”

Spot silver daily chart source: Yihuitong
At 15:14 Beijing time on July 9, spot silver was quoted at $36.56 per ounce
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