Copper holds losses as stronger dollar and hawkish Fed weigh on demand

Copper prices are stuck in a ditch. The metal that powers everything from electric vehicles to data centers fell more than 1% in the days following the Federal Reserve’s June 17 meeting, settling near $6.24 per pound, its lowest price since May 2026.

The culprits are familiar: a surging US dollar and a Fed that sounds more interested in hiking rates than cutting them. For a commodity priced in dollars and sensitive to global growth expectations, that combination hits like a one-two punch.

Warsh’s hawkish debut

Fed Chair Kevin Warsh held his first FOMC press conference on June 17, and he didn’t waste time being gentle. The updated dot-plot projections showed the median rate path shifting higher, while the PCE inflation forecast was elevated to 3.6%.

Markets read the tea leaves and started pricing in at least one rate hike before year-end. The dollar responded by climbing to a one-year high, which is great news if you’re an American tourist in Europe but terrible news if you’re trying to sell copper to buyers paying in yen, yuan, or euros.

The sell-off wasn’t limited to copper. Gold and other base metals took hits as well, following the same playbook that’s repeated across every hawkish Fed cycle in recent memory. Industrial metals as a group stayed pinned near Tuesday’s lows with no obvious catalyst to reverse the slide.

The crypto connection you might not expect

Copper’s struggles have a less obvious ripple effect: tokenized metals on crypto platforms. These digital representations of physical commodities have grown into a meaningful niche, and they tend to move in lockstep with the underlying assets they represent.

During a prior pullback in January 2026, tokenized metals suffered approximately $120 million in liquidations. That episode underscored how tightly linked these digital products are to traditional commodity price swings. When copper and gold drop sharply, leveraged positions in their tokenized equivalents can unwind fast.

That said, tokenized metals have shown more resilience during this particular downturn than they did in January.

Why copper bulls aren’t panicking yet

Electric vehicles alone consume roughly three to four times as much copper as their internal combustion counterparts. As EV adoption continues expanding globally, that demand floor keeps rising regardless of what the dollar does in any given month.

Analysts have noted that these structural drivers could temper the downside, creating a scenario where copper prices find support well before they reflect the full weight of monetary tightening.

For holders of tokenized metals, the calculus is similar but amplified by leverage. The $120 million in January liquidations proved that these products can move violently during commodity drawdowns. Managing position sizes and maintaining adequate collateral isn’t just good practice right now, it’s survival strategy.

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