Copper Futures Surpass $5 per Pound in New Historic Closing High, Up Over 8% for the Week

The rapid increase in copper prices has been driven by a wave of speculative buying in the derivatives market. This sudden interest has prompted concerns among industry experts about the formation of a speculative bubble.

The frantic bets by speculative funds continue to push copper to historic highs, as reflected in the positions reported in the Commitment of Traders (COT) report by the U.S. derivatives regulator.

The results are evident: July copper futures rose 3.55% on Friday and 8.31% for the week, ending the last trading session at $5.05 per pound. This marks the highest closing price in the history of the comparable series, following an intraday record of $5.13 per pound on Wednesday. It is also the largest weekly gain since April 3, 2022.
Speculative Surge

In the very short term, what is happening—and could continue to happen on a daily basis today, next week, and in the coming weeks—is that market speculators are entering forcefully, believing that prices will keep rising. This creates a self-reinforcing cycle, leading to what is known as a speculative bubble.

Managed money traders on the Comex declared a net position of 69,225 contracts (equivalent to approximately $8.5 billion) on Tuesday, the highest since February 2021, according to a report released this Friday by the Commodity Futures Trading Commission (CFTC).
Hedge Funds on the Offensive

Notably, hedge funds betting on rising prices are making unprecedented long positions worth nearly $16.4 billion, compared to $7.9 billion declared by shorts, who are being forced to sell at a loss. This disparity highlights the aggressive bullish bets by speculative funds, which are driving the current price surge.
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