Kwacha extends losses for third consecutive session

In its market commentary, the bank said the copper-gold ratio had fallen by more than 10 percent during the month, despite long-term United States Treasury yields remaining close to multi-year highs.

The bank said the divergence suggested that higher interest rates were increasingly constraining investment linked to artificial intelligence rather than simply reflecting stronger economic growth.

This could place additional pressure on commodities that are more sensitive to economic growth, including copper.

Access Bank also pointed to speculative positioning as another risk for the metal, noting that speculative exposure to copper was at the 100th percentile of its five-year range, compared with 62nd percentile for gold.

The bank said the high level of speculative positioning left copper vulnerable to a sharp unwinding of long positions.

Despite the near-term risks, Access Bank maintained that copper’s longer-term supply and demand outlook remained positive.

The bank said growing demand linked to electrification and artificial intelligence infrastructure would continue to support the metal over the longer term.

However, it cautioned that elevated borrowing costs and stretched market positioning could trigger a sharper correction in copper prices in the near term.

Copper has remained a closely watched commodity for Zambia, where the mining sector is a major source of export earnings and foreign exchange.

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