Copper hit a record near $6.63 per pound on June 2, but has since slid to around $6.27 — a drop of roughly 6%. The retreat came as the US Dollar Index climbed, putting pressure on commodities priced in the currency. Yet the pullback is colliding with a surge in expected demand from hyperscale AI data centers, which each can consume up to 50,000 tons of the metal.
A record and a retreat
The June 2 peak marked the top of a months-long rally. In the weeks that followed, copper formed a bearish double-top pattern against that record zone in May and early June — a technical setup that often signals a reversal. Combined with a rising dollar, the metal lost momentum. By mid-June, it was trading around $6.27, roughly where it stood in early May.
Why copper is under pressure
Strength in the dollar has been the most immediate headwind. As the DXY climbed, copper stalled. The metal is priced in dollars, so a stronger greenback makes it more expensive for buyers using other currencies. That tends to dampen demand and push prices lower.
Futures market positioning tells a split story. Commercial hedgers — companies that physically use or produce copper — are heavily net short and recently trimmed their long positions by 3,254 contracts, according to the latest CFTC Commitments of Traders report. That suggests industrial players see limited upside near term. Meanwhile, non-commercial speculators (mostly hedge funds) hold 111,525 long contracts versus 32,692 short, and they added 5,852 longs into the highs — a bet that the rally had more room to run.
The AI data center copper boom
Despite the price retreat, the demand picture remains extraordinarily bullish. A single hyperscale AI data center can use up to 50,000 tons of copper, compared to 5,000–15,000 tons for a conventional data center, according to the Copper Development Association. With 527 new data centers under construction worldwide, the appetite for wiring, transformers, and cooling systems is massive.
JPMorgan estimates data centers will need about 475,000 tons of copper in 2025, a sharp increase from the prior year. That number is almost certain to keep rising: S&P Global projects a global copper deficit of 10 million tonnes by 2040, equivalent to roughly 33% of current annual demand. Overall demand is expected to climb to 42 million tonnes by 2040, from 28 million tonnes today.
Nvidia CEO Jensen Huang said in recent remarks that copper will dominate chip interconnects for as long as possible before any shift to optics. That means the metal's role in data center infrastructure is here to stay for the foreseeable future.
Traders bet on a rebound — or a correction
Options traders have turned bullish on the CPER copper ETF. The put-call volume ratio dropped to about 0.11 from 0.27, and the open interest ratio sits near 0.19 — a heavily call-skewed bet that prices will rise again. That stands in stark contrast to the commercial hedgers' caution.
A proprietary Copper-Gold Investor Rotation Index, which tracks investor flows between the two metals, now sits near 1.23 — close to the top of its range. The last time it reached this level, in January, it fell sharply near copper's peak and preceded a significant correction. If the pattern repeats, the current pullback could deepen before the metal finds its footing.
For now, copper is caught between two forces: near-term technical and currency headwinds, and a long-term demand wave from AI infrastructure that shows no signs of slowing. Whether the bulls or bears win out will depend on how quickly the broader market absorbs the new data center buildout — and whether the dollar keeps climbing.
