Spot copper prices fell notably last week after Goldman Sachs abandoned its long-standing bullish position. The ongoing decline in the metal, which has been steadily falling since May, is now facing further downside pressure, a trend that could weigh heavily on the Australian Dollar given the country’s commodity-linked economy.
Goldman Sachs made waves by slashing its 2025 copper price forecast by nearly a third, citing weaker-than-expected demand outlook in China. Previously, the bank had projected that copper would reach USD 15k per tonne next year. That forecast has now been downgraded to just USD 10.1k. The bank noted that softer demand for commodities and increasing downside risks to China’s economy required a “more selective and less constructive” view of the broader commodities market.
Technically, spot copper’s price action also supports this bearish outlook. Rebound from 3.9127 appears to have topped out at 4.2743, where it was rejected by the falling 55 D EMA, an bearish indication that the market is gearing up for further declines. As long as 4.2743 resistance level holds, risk remains skewed to the downside. Firm Break of 3.9127 will resume whole fall from 5.1650 to 61.8% projection of 4.6839 to 3.9127 from 4.2743 at 3.7977 next.
The outlook for the Australian Dollar is closely linked to these developments. With copper facing continued weakness, the AUD is likely to come under additional pressure.
AUD/NZD has been on a downtrend since July, with only a brief recovery following the unexpected rate cut by RBNZ in mid-August. For now, further fall is expected as long as 55 D EMA (now at 1.0930) holds. Next target is 1.0730. Some support could be found there to form a bottom. However, decisive break of 1.0730 will pave the way back to 1.0567 key support.
