Weekly Copper Futures Outlook: August 18, 2025 π
Copper futures experienced an interesting week leading up to the August 12 Commitments of Traders (COT) report, with notable shifts in speculative positioning amidst overall declining open interest. This week's outlook synthesizes key fundamental and positioning data to provide a clear market sentiment.
Commitment of Traders (COT) & Positioning Analysis
The most recent COT report for Copper- #1 (Code-085692) as of August 12, 2025, reveals a significant increase in speculative bullishness. Non-commercial traders, often seen as trend-followers or speculators, increased their net long position by 7,525 contracts from the previous week. This shift was driven by a rise of 3,873 in long positions and a decrease of 3,652 in short positions for this category. At the same time, commercial traders, typically hedgers, expanded their net short position by 5,271 contracts, increasing their total short exposure, likely to offset the growing speculative long interest. This divergence indicates that non-commercial participants are increasingly betting on higher copper prices, while commercials are providing the opposing side of these transactions.
Key Fundamental News
From a fundamental perspective, there hasn't been specific, direct news regarding copper supply or demand in the past week. However, broader macroeconomic trends can influence commodity prices. The U.S. consumer sentiment declined, which led to a fall in the U.S. Dollar Index. A weaker dollar typically makes dollar-denominated commodities like copper more attractive to international buyers, providing an indirect tailwind for prices.
Open Interest & Volume Trends
Total Open Interest for Copper decreased by 4,182 contracts from August 5 to August 12, reaching 193,751 contracts. This decline in overall open interest, while non-commercial net longs increased, suggests that some of the buying could have been short covering, potentially from commercial or nonreportable accounts, rather than entirely new money entering the market on the long side.
Seasonality
Historically, August tends to show a slight negative average return for High Grade Copper Sep '25 futures, with an average return of -0.0345. Only 37.50% of August months have seen positive returns. This seasonal tendency suggests that while recent positioning is bullish, the month itself has historically presented a challenging environment for upward price momentum.
Closing Outlook
Based on the current data, our market sentiment bias for copper futures leans bullish from a speculative standpoint, but with caution. The significant increase in non-commercial net long positions is a strong indicator of speculative conviction in higher prices. This aligns with the price increase observed during the reporting week. While the overall open interest decline might suggest some short-covering activity contributing to the rally, the underlying fundamental news of a weaker dollar could provide some supportive momentum for copper.
For the upcoming week, long opportunities could arise if non-commercial buying persists and the dollar remains under pressure. Traders might look for continued strength in price action as speculators aim to push the market higher. However, it's crucial to acknowledge short-side considerations: the increase in commercial net short positions indicates ongoing hedging by producers or industrial users, which could cap upside moves. Furthermore, the historical August seasonality points to potential weakness, meaning that current bullish momentum could face headwinds. Monitoring general economic sentiment and any new supply/demand developments will be key. While the speculative interest is clear, the overall market structure and seasonal patterns suggest a need for careful risk management.
β
Trade smart,
Joseph O.
SmartMoneyTrade.com
Whatβs Next?
Join me on X (@AlienInvestor) for daily futures trade ideas: x.com/AlienInvestor. Grab my free COT Cheat Sheet at cot.smartmoneytrade.com to master these insights. Reply with your trading goalβIβll send a tailored tip!
β