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This paper deals with the investigation of amplifying the effect of local magnetic saturation for displacement measurement using copper shielding. In previous works could be shown that nonlinear magnetic materials were used for contactless displacement measurement. This was done by using a constant field source representing a sender and a detection unit based on alternating current (AC) fed coils with embedded nonlinear magnetic material. By superimposing these two electromagnetic fields changing position of the source, the position between sender and detection unit can be observed. The detailed physical aspects of the operating principle was presented in . In this work these fundamentals are used to develop and improve the operating principle. Therefore a copper shielding in the detection unit is inserted for modifying the field distribution towards the ferromagnetic material triggered by induced eddy currents in the copper shielding. This reinforces the effect of local magnetic saturation, that is shown by an investigation of a prototype using Finite-Element Analysis (FEA).