- The price of the metal has surged to record highs this year
Copper prices could tumble by the end of the year if the US Federal Reserve begins to cut interest rates, according to analysis.
The price of the metal has surged to record highs this year and has reached more than $10,000 a tonne.
But it is more likely to drop to between $7,000 and $7,500 a tonne by the end of this year, analysts at Liberum said.
Fall risk: Copper prices could tumble by the end of the year if the US Federal Reserve begins to cut interest rates, analysts claim
This contrasts with consensus forecasts that it will remain above $8,500.
Like gold, the red metal is increasingly being seen as a hedge against inflation.
But Liberum argues that once inflation gets under control in the Western world and the US begins to lower interest rates, copper’s allure is likely to fall.
The metal is also a critical metal for the green transition and industries such as construction.
But an increasing number of analysts believe that the increased need for copper in the green revolution has been ‘priced in’ – meaning its value is already reflected in current prices.